Amaravathi Poised To Become A World Class City

Knight Frank India, a global property consultant, today released a report on the two upcoming State capitals - Amaravathi in Andhra Pradesh and Naya Raipur in Chattisgarh.

The report highlights the potential of both the greenfield capital cities and the ripple effect they will have on real estate development.

Amaravathi's unique positioning and strategic location, and the proposed infrastructure developments will ensure its status as a world class city and also as an influence zone since international consultants are involved in developing it.

According to the report, Amaravathi's proximity to urban centres like Vijayawada and Guntur will ensure that the broader capital area will provide a large talent pool. Coupled with adequate infrastructure, it will also provide a good option for industrial units and businesses to set up base in Andhra Pradesh.

The proposed physical infrastructure like metro rails and an international airport in Mangalagiri will boost the capital city's appeal in general and the broader capital region in particular. The high-speed rail corridor to be built in collaboration with Chennai, Bengaluru and Hyderabad will improve connectivity to Amaravathi. And apart from road and rail networks and BRTS, a special 3 km-long underwater tunnel in the Krishna river will connect Amaravathi to Vijayawada.

Vijayawada and Guntur will be the two major urban centres that will benefit most from the new capital. Vijayawada will be promoted as the commercial capital and Guntur as the knowledge hub of the State. Capital values in the emerging micro-markets of Vijayawada are in the range of Rs. 1,800 - Rs. 7,000 per square foot. Some of these micro-markets are Vuyyuru, Auto Nagar, Kannuru and Poranki. In the upcoming micro markets of Guntur like Undavalli, Manglagiri and Gorantala, land values range between Rs. 2,200 and 4,500 per square foot.

The office rentals in upmarket localities of Vijayawada are around Rs. 60 - Rs. 70 per square foot per month in micro-markets like the Benz Circle at Bandar Road. At the lower end of the spectrum, however, rentals are between Rs. 10 and Rs. 15 per square foot per month in the Patamata, Bhavanipuram and Maruthinagara areas. Guntur lacks quality office spaces, and the average rentals in the office market are pegged at Rs. 30-50 per square foot per month in Brodipet and Arundalpet, and Rs. 10-15 per square foot per month in Lalapet and Patnam Bazar.

While the real estate boom is an interesting story, so are investments. Domestic and international corporates are eyeing huge investments in industries including retail, energy, education and healthcare. And these will again have a positive impact on Amaravathi's real estate in particular and on that of the broader capital area in general. A few examples of private sector companies that have expressed their desire to invest in Andhra Pradesh are Suzlon Energy, Walmart, Pepsi, Colgate and Palmolive.

Knight Frank Hyderabad director Vasudevan Iyer said, "Amaravathi is uniquely positioned and will be able to attract large scale investments due to its proximity to two major cities of Andhra Pradesh, namely Vijayawada and Guntur. Also, the proposed infrastructure will provide the growth stimulus to Amaravathi.

"Hyderabad, which had taken a backseat to some extent before the bifurcation of the state, is set to grow stronger in the future as it has the necessary infrastructure, talent pool and conducive business environment to remain attractive for companies, especially in the medium to long term. While Amaravathi will come up as a potential power centre, Hyderabad will continue to enjoy its growth curve."