Andhra Pradesh – Bright Prospects for Real Estate

Andhra Pradesh is a shining example of the IT revolution sweeping India. Well endowed with mineral and agricultural wealth, AP embarked on a reform process in the 1990’s to make Information technology, bulk drugs and pharmaceuticals, agro processing, engineering, textiles, leather goods, gems and jewellery the backbone of its economy.Commercial and residential property in Andhra Pradesh has received a thrust from the several Industrial Parks which include the Export Promotion Industrial Park, Apparel Export Park, Vishakapatnam Export Processing Zone, Growth Centre, Bobbilli, and Hardware Park near Hyderabad. With abundant opportunities available, foreign direct investment into Andhra Pradesh has been Rs. 4,412.80 crore upto September 2006.

Andhra’s major cities Hyderabad, Vishakapatnam, Vijaywada and Tirupati are linked by air, though Hyderabad has the only international airport presently. A new facility to ferry 40 million passengers annually is under development at Shamshabad. Excellent existing road and rail connectivity, with a number of new projects in different stages of construction and planning make Andhra Pradesh an ideal investment destination.

In addition to the Industrial, Biotechnology, Small Scale Industries and Infrastructure Policies that the Andhra Pradesh Government put in place to achieve its growth targets, it recognised the tourism industry as a powerful driver of business in the new millennium. The “Andhra Pradesh Unlimited” tourism policy recognizes the advantage of offering the attractions of other places in the region with places in Andhra Pradesh as a complete package. Hyderabad, Kurnool, Warangal, Nagarjunasagar, Srisailam, Tirupati, Puttaparti and Vijaywada offer tourists scope for spirituality, history and culture, adventure sports, sound and light shows and a rich tradition of handicrafts and handlooms.

Real Estate Development in Andhra Pradesh

Map of Andhra Pradesh
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The economic reform process that was initiated in the 1990’s, the ‘corporatisation’ of the administration and aggressive promotion of the state to global IT giants had a very positive impact on the real estate market in Andhra Pradesh. With a surge of professionals and NRIs homing in, the demand for commercial and residential property zoomed. Real estate developers were faced with challenging assignments to meet the requirements of MNCs flocking to Andhra.

A supportive government chalked out a strategy of self-contained and integrated IT parks (HITEC City and Cyberabad), Export Processing Zones and Growth Centres, creating a real demand for commercial spaces and residential property in Hyderabad. The surge of activity has attracted foreign direct investment to Andhra Pradesh – a consortium of real estate developers from Jurong International from Singapore and Springfield Land of Australia will develop a Science City on 65,000 acres of land between Odicheruvu and Ammadiguda in Anantpur, providing employment to 2.5 million people. The Odyssey Science City will provide state-of–the-art infrastructure for IT, biotech, artificial intelligence and the bio-pharma sectors at an investment of $25 billion over 10 years.

The Ministry of Urban Development approved 25 projects in February 2007 at a cost of Rs. 908.18 crore for urban development projects in Hyderabad, Vijaywada and Vishakapatnam. 23 projects in small and medium towns have been allotted Rs. 85.31 crore. Property developers are working on housing projects in the vicinity of the new specialty parks around Hyderabad, Anantapur, Vishakapatnam and Vijaywada.

AP has operational Special Economic Zones in Vishakapatnam, Kakinada, and Hyderabad. Commercial property in Andhra Pradesh is expected to zoom, with additional SEZs notified in January 2007:

  • Vishakapatnam – Divi’s Laboratories in Chippada, Hetro Infrastructure in Narsapuram, APIIC in Madhurawada
  • Ranga Reddy District – Wipro Limited, A.P. Techno Projects, Serilingampally , Satyam Computers in Bahadurpally, CMC Limited, Sanghi SEZ,
  • FAB City SPV, Srinagar
  • Nellore District – Apache SEZ in Mandal Tada
  • Krishna District – APIIC in Kesarapalli
  • West Godavari District – Whitefield Paper Mills in Tallapudi Mandal
  • Madhapur – K.Raheja IT Park, Satyam Computers

In the realm of residential property, the Andhra Pradesh Housing Board approved in December 2006 the construction of 7000 more modern housing units at a cost of Rs.2000 crore in Hyderabad and Khammam. These will be taken up as public-private partnerships. Private developers short listed for these projects are: DLF Universal, Embassy Unity Consortium, Ambience Properties, Madhucon-Binapuri Consortium, K. Raheja Corp. and IVRCL. The Singapore Township at Pocharam, nearing completion and the Malaysia Township at Kukatpally under construction are also residential projects with foreign direct investment.

With the notification of the SEZs in AP and the Housing Board’s invitation to private developers, real estate is set to achieve new heights in the next decade in Andhra Pradesh.

Cities of Andhra Pradesh
Adilabad
Nagarjunakonda
Anantapur
Nalgonda
Chittoor
Nellore
Cuddapah
Nizamabad
East Godavari
Prakasam
Guntur
Rangareddi
Secunderabad
Karimnagar
Sri Kakulam
Khammam
Krishna
Kurnool
Vizianagaram
Mahbubnagar
Warangal
Medak
West Godavari