Realtors convert commercial projects into residential amid tepid demand
As a result of the Covid-19 outbreak, numerous realtors have transformed their commercial projects into residential ones. So far this year, about 25 commercial projects have been converted to residential developments. In the instance of 20 commercial developments in Ahmedabad Municipal Corporation areas, revised building designs have been authorised (AMC). Five more projects in the Ahmedabad Urban Development Authority (AUDA) area have been converted from commercial to residential.
“At Panjrapole crossroads, we changed our commercial project into a residential one. The project now includes showrooms as well as 3 BHK plus work from home (WFH) apartments. We modified our plans because there was a high demand for residential units in this area,” said Chitrak Shah, a city-based realtor, and vice-president of CREDAI-Ahmedabad GIHED, an association of city-based real estate developers. After getting its revised development plan approved, another real estate business, Venus Infrastructure, has turned its commercial project behind Rajpath Club in Bodakdev into an upscale residential scheme.
“Our commercial project was heavily reliant on retail, and after the epidemic, demand for retail premises plummeted. The project’s location has always been ideal for residential development. As a result, we turned to a residential project,” Rajesh Vaswani, executive director of Venus Infrastructure, explained.
A developer in Sanand proposed the construction of a cinema and a shopping centre. He did, however, change the plan to a twin bungalow concept in the same location.
Work from home, heavy inventory, corporate expansion on hold, territorial constraints, and fewer footfalls in showrooms and malls due to Covid-19 have stifled demand for retail and office spaces in commercial developments, according to the real estate sector. Three commercial projects had their plans changed in 2018-19, bringing the total to seven in 2020. According to AMC officials, the number increased in 2021.”On one hand, office vacancy is high and rental rates are declining; on the other hand, prospects for retail spaces remain murky due to pandemic fears. Residential housing demand, is strong, and residential housing inventory is currently relatively low. Switching from commercial to residential makes sense right now,” he continued.
Commercial projects were in high demand in 2018 and 2019, according to AMC and AUDA officials. In 2021, the trend has shifted. Currently, roughly 80% of building designs awaiting clearance in both the AMC and the AUDA are for residential developments. In recent years, the ratio has risen to 60%.
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