Telugu Desam Party chief N Chandrababu Naidu says Amaravati will be the sole capital of Andhra Pradesh. This comes a day before Naidu’s swearing-in as the state chief minister.
“In our government, there will be no games under the guise of three capitals. Our capital is Amaravati. Amaravati is the capital,” Naidu was quoted as saying by news wire PTI.
Naidu-led TDP, which won 16 seats in the recently concluded Lok Sabha polls, emerged as one of the kingmakers for the National Democratic Alliance (NDA) government at the Centre.
Real estate consultant Anarock believes the recently concluded election mandate has renewed the prospects of Amaravati in Andhra Pradesh. While this dream project was shelved by the previous government, there are now very distinct possibilities of its revival, says Anarock.
“However, developments of a new capital city and the massive ecosystem it entails is a task of epic proportions. Despite all political will and support, it will take time to fructify - and to emerge as real competition to Hyderabad,” it says.
“N Chandrababu Naidu has already proved his mettle in developing Hyderabad as a major city with world class infrastructure, and was successful in attracting major IT-ITeS, pharmaceutical and industrial companies to the state. This has been instrumental in generating employment and attracting talent from across the country, thus also spurring rapid real estate development,” says Anarock.
The Hyderabad real estate market will be significantly affected by the outcomes of the recent general election, according to Anarock. The peoples’ mandate in neighbouring Andhra Pradesh with a large majority and an important ally at the centre may lead to moderation of real estate growth in Hyderabad. Land prices in Hyderabad had appreciated by over 30% in the last three years. This had influenced prices rises across asset classes in the city.
Anarock forecasts the volume of residential real estate launches in Hyderabad to also rationalise as investors and buyers scout for competitive opportunities in Andhra Pradesh - which is expected to witness a surge in development along the new growth corridors.
Andhra Pradesh's potential development can be a double-edged sword for Hyderabad real estate, the property consultant says. However, the overall impact is likely to be positive as Andhra Pradesh's growth could spark a ripple effect, attracting businesses and investors to the entire region.
“This could lead to increased demand for office and commercial space in Hyderabad, especially along key corridors like the Hyderabad-Vijayawada highway. This area is already being primed for development with infrastructure projects and industrial parks, making it a potential growth engine for Hyderabad real estate,” says Anarock.
While the outlook is promising, there are challenges. Some out-migration of businesses or residents to Andhra Pradesh is possible, especially if AP offers lucrative incentives, says Anarock. This could draw some investments away from Hyderabad, leading to a temporary correction in Hyderabad's real estate prices and a potential dip in the commercial real estate market, it cautions.
However, the presence of a large talent pool and developed infrastructure of the city, with enhanced connectivity, could make it difficult for companies to venture into a new state in the short term, it says.
