Realty impact: Vijayawada as new capital of AP
Vijayawada has got the government’s nod as the new capital of Andhra Pradesh! This decision was taken by the Cabinet on September 1, 2014, after extensive deliberations and thus ending all speculation. The Cabinet decided to utilise the stretch between Vijayawada and Guntur to develop the new capital. This is despite the recommendations put forward by the Sivaramakrishnan Committee in its report. The Committee which submitted its report to the government two days back had opposed the Vijayawada-Guntur stretch for developing the capital citing ecological issues.
Impact on Realty
This decision by the government is expected to have far-reaching implications on the realty sector of the city and its surrounding areas. However, the major challenge before the government would be to acquire the necessary land for various development activities. This includes the development of various government organisations like the Secretariat, the Assembly and the High Court, amongst others. Besides, various important infrastructure facilities like schools, colleges, universities and hospitals, among others will need to be developed for which large land parcels will be needed. In case the government faces issues with acquiring land along the Vijayawada-Guntur stretch, it has plans to acquire land in Nuzivedu, which is about 42 km away from Vijayawada in Krishna district.
Land values in the city are expected to rise considerably with the announcement of the new capital. Currently, there is a steady demand for residential property in many important localities in the region. They include localities like Guntur, Gannavaram, Mangalagiri, Tenali, Eluru and Gudivada, among others. With the government’s proposal to develop the capital along the Vijayawada-Guntur stretch, land values along this corridor are expected to increase tremendously. Besides, the corridor connecting Vijayawada with Nuzivedu is also likely to get a major realty impetus with land values appreciating considerably. Industrial corridors are also likely to be developed along this stretch which is expected to provide a tremendous boost to residential realty.
Major residential areas within the city like Benz Circle, Auto Nagar, Vidhyadharpuram, Governorpet, Gandhi Nagar, Bhavanipuram, Bharathi Nagar, Gunadala, Kanuru, and Ramavarappadu, among others are expected to appreciate considerably in realty terms. Besides, demand for residential property in other areas within the city are also expected to increase. However, much of this demand will be based on the availability of developable land as well as the availability of infrastructure facilities in the vicinity. With the capital status being bestowed on the city, emphasis is expected to be placed on infrastructure development across the city. Subsequently, demand for residential realty across the city is expected to be enhanced leading to appreciation in values for residential property. As a result, many major developers are expected to embark on prestigious residential projects in future to cater to the rising demand. Investors in both land as well as rental property are also expected to get healthy returns on their investment, with capital as well as rental values in most areas across the city expected to appreciate remarkably.
Specifics of the Committee report
The Sivaramakrishnan Committee which was entrusted by the government to study the feasibility of different cities as the new capital had submitted its report about two days back. Incidentally, the Committee had opposed the selection of the Vijayawada-Guntur stretch to be developed as the new capital. It was stated that as most of the land along this stretch was land under cultivation and converting it into a concrete jungle could result in serious ecological implications. However, the report was evidently not given much consideration while deciding on the new capital.
