Telangana, Andhra are next big realty investment destinations

The property market in bifurcated Andhra Pradesh is likely to forge ahead, owing to pro-industry policies and a grassroots-level economic agenda.  

While most realty players agree the leadership in Telangana will harness the most it can of the established information technology (IT) sector and the infrastructure here, many say the pro-business credentials of Chandrababu Naidu will be a shot in the arm for real estate in residual Andhra Pradesh.

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Even as most developers consider Hyderabad a key market, next only to Bangalore and Chennai in the south, they expect many tier-II and tier-III regions, in both residual Andhra and Telangana to catch up. 

Though the Telangana Rashtra Samithi (TRS) manifesto wasn't flamboyant on the party's agenda for the services sector, it is expected the leadership will primarily rely on this segment to boost jobs and living standards.

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Trivita Roy, assistant vice-president, Jones Lang LaSalle, Hyderabad said, "To keep investor interest strong in Hyderabad, the government in Telangana has to come up with a pro-active agenda, just like those of previous chief ministers.  

Keeping the focus on the services sector intact, the government here can also try to unlock the potential of the manufacturing sector to create new jobs and keep the investment sentiment buoyant." Trivita Roy, assistant vice-president, Jones Lang LaSalle, Hyderabad.

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She added Naidu's earlier record in drawing IT giants such as Microsoft, Cognizant, Tata Consultancy Services and Infosys to Hyderabad, coupled with the rapport he shared with Prime Minister Narendra Modi and other Bharatiya Janata Party seniors, was considered a positive by many domestic and foreign investors.  

In united Andhra Pradesh, Hyderabad was the single-largest investment destination. But after the state is bifurcated, new avenues, including the fringe regions of Medak, Nalgonda and Warangal in Telangana; and Visakhapatnam, Guntur, Vijayawada, Kakinada, Rajahmundry, Tirupati, Nellore and Ongole in residual Andhra, have turned attractive for property investment.

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Jayashree Kurup, head of content and research at MagicBricks, a real estate portal said, "Even before the division, besides Hyderabad, Visakhapatnam and Vijayawada attracted active interest from buyers." 

Data compiled by MagicBricks show in the year ended April, per sq ft values across four key locations in Visakhapatnam rose 5-14 per cent; the prices stood at Rs 2,350-3,650/sq ft. Kurup said there was no sudden jump in end-user interest in other tier-II & tier-III locations.  

"It is too early to predict real estate growth based on the policies Naidu will propose in the new state," she added.

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At its meeting with TRS chief K Chandrasekhar Rao, the Confederation of Real Estate Developers of India (Credai) stated the need to fast-track land clearances and suggested the government take full responsibility for setting up basic infrastructure in investment zones. "KCR (K Chandrasekhar Rao) reacted positively," said Credai president C Shekar Reddy.  

Credai considers the BJP's plan to carve out 100 new cities a major boost to the country's realty sector. 

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This might result in a rise in land prices across tier-II and tier-III locations. Besides, an affordable housing scheme, part of the TRS election manifesto, will have a positive spill-over on other sectors.  

Meanwhile, rumours that the capital for residual Andhra might come up near Guntur-Vijayawada have sent land prices soaring in this region; the prices are being quoted at 100-150 per cent more than a year earlier.  

"Active interest will take another six-nine months, as consumers expect prices to rise only six months after the elections," says Sudhir Pai, business head, MagicBricks.

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