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Amaravati – A capital in the making

The proposed capital is strategically located between Vijayawada and Guntur, but will only serve as major suburbs to Amaravati after its development.

Surabhi Arora
Colliers International

Amaravati, the new capital of Andhra Pradesh has already started making buzz with its big plans and various state government initiatives. After the bifurcation of Andhra Pradesh and Telangana, Hyderabad which is one of the prominent IT/ITeS hubs, is no longer located in Andhra Pradesh; and as per the Andhra Pradesh Re-organisation Act 2014, Hyderabad will remain the joint capital of both the states, but not for more than 10 years. With an objective to establish Amaravati as a world class city, the state government notified 33,000 acres of land spread over 29 villages as urban area and has acquired the land under land pooling scheme. All these villages come under three mandals, namely; Mangalagiri, Thullur and Tadepalle.

The proposed capital is strategically located between Vijayawada and Guntur, but will only serve as major suburbs to Amaravati after its development. Due to availability of large track of land on the banks of Krishna River, this seems to be ideal choice for AP for an exponential planned development which is easily accessible from north and south, coastal districts. Interestingly, the state govt. has initiated a campaign named ‘A Brick’ (Amaravati Brick), to make people of the state, partners in the development of the new capital of Andhra Pradesh. Where anybody can donate bricks costing INR 10 for the development of the city. A Japanese firm Maki and Associates has been selected for master planning of this city. The plan is to complete the first phase by 2018, which includes the development of ‘The Amaravati Government Complex’ as the initial seed development of Amaravati, besides a few skyscrapers, government offices, housing and essential services.

Much like any other city, following these announcements, the real estate in Amaravati has started picking up and the land prices have gone up multi-folds. Hyderabad has also started picking up, after the political turmoil coming to an end. A number of companies like Apple, Google, and Amazon announced big plans for the city and leased large commercial office spaces. Amaravati has also started getting international attention and Singapore Govt. has agreed the construction of the seed capital region of 8 Sq. Km. The Government has already allotted INR 1500 crore for capital construction and the city is in race to get the smart city status, which if approved will be able to get funds from the central govt. According to market sources a few universities have shown an interest to develop their campus in the city which will help supply the much needed talent for the development of the city.

Due to such big plans and all the positive initiatives, such emerging markets look lucrative for investment, however, before investing in these markets one should be aware of the risks involved. A number of plotted as well as high rise development is coming up in this area. The price for residential plots depends largely on their location, which range between INR 7000 to 15000 per sq yard. Before making any investment, conduct a proper market research and due diligence, look at the developer’s profile and do the site visit. As the area is still in planning stage one can expect change in plans and delays in development, thus, plan long term for investment.

With master plan in place and seed capital in hand, looks like Amaravati is all set to repeat the Hyderabad growth story. However, it is very early to say if the city would be able to establish itself as a commercial hub, much like Hyderabad.
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First Published on Jul 5, 2016 05:37 pm
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