Ahmedabad: Cash crunch in realty puts brakes on land deals

AHMEDABAD: Cash crunch triggered by Non-Banking Finance Companies (NBFCs) crisis has brought land deals in and around Ahmedabad to a grinding halt. Hardly any big-ticket land deals has been struck in the past three months. What's more, a number of deals struck before Diwali last year are either stuck or shelved owing to liquidity problems faced by real estate developers.
A realtor recently pulled out of the negotiation to purchase 13,000 square yard plot in Thaltej area citing liquidity issues. This land parcel's market value is approximately Rs 160 crore. One more transaction pegged at Rs 350 crore for a 28,000-square yard party plot on SG Road could not materialise due to similar reasons. Another deal valued at Rs 115 crore for 11,500 square yard plot near Vaishnodevi circle is also pending completion.
"There are no major land deals happening due to lack of money and opportunity in the market," said Balbirsingh Khalsa of Knight Frank India, a real estate consultancy firm. A few of the land deals executed before November 2018 have also been called off, while others are still pending finalisation. About 20 land deals worth hundreds of crores were executed in Ahmedabad before Diwali.
Ahmedabad real estate market depends heavily on NBFC's for finance. Gujarat, particularly Ahmedabad has seen a jump an annual jump of 50% in finances availed from NBFC's in last three year.
"However, several NBFCs have stopped financing now," said a realtor.