Vizag's promotion as smart city to spur real estate prospects

Visakhapatnam, until recently just a port city in Andhra Pradesh, seems set for big developments, which could have a direct impact on the real estate sector.

Flipkart, India's largest online retailer, is eyeing wholesale space in an upcoming logistics park near the Visakhapatnam Port Trust, according to a report in the Economic Times on Wednesday. The online retailer is said to have expressed interest in purchasing at least one million square feet in the upcoming logistics park, which is to be built with an investment of 600 crores. While e-commerce companies are facing tax disputes in the neighbouring states of Telangana and Karnataka, Flipkart's willingness to invest in Visakhapatnam might just be the kind of encouragement the city's commercial real estate sector needs.

Despite its recent conflict-fraught bifurcation in March last year, the new state of Andhra Pradesh seems to be making up for the loss of Hyderabad rapidly under Chief Minister Chandrababu Naidu. The investment boost that Hyderabad previously received in the undivided Andhra Pradesh was under the leadership of Naidu. The credibility of his leadership already seems to be creating a positive buzz around Visakhapatnam, which aims being the financial and commercial capital of the new Andhra Pradesh. The Central Government grant of 850 crores to the Naidu Government, as reported in today's Times of India is further proof of the financial stability that the state seems to be fast approaching.

The proposed logistics park at Anakapally, close to Visakhapatnam and spanning 500 acres, will help in establishing Visakhapatnam as the most important port city on the east coast of India. Until now, the port city was playing second fiddle to Kolkata and Chennai. The development might also serve as an opportunity for Andhra Pradesh to emerge as a gateway to economies in the Southeast by allowing the project to take advantage of the 13 possible seaports along the state's long coastline.

Real estate analysts and developers based in the city argue that the city is naturally positioned to be the new investment hotspot for Andhra Pradesh. Visakhapatnam can boast of having the only international airport in Andhra Pradesh as it is a major naval base on India's east coast and also hosts several PSUs. Key stake holders in the real estate sector in Vizag add that the state government's initiative to build stronger infrastructure in the state will drive investors to the real estate sector. A proposed metro in Vizag and its positioning as an upcoming smart city by Union Minister for Urban Development Venkaiah Naidu adds immensely to real estate prospects in the city.

While analysts hope that Flipkart might be an anchor client or one of the largest clients of commercial real estate in the city, Flipkart spokespersons have refused to comment on this, according to the Times of India report. Vizag port officials have revealed further plans to hire a consultancy firm through global competitive bidding that will prepare detailed design and roadmap for attracting investors to the city. The proposed logistics park, on completion, aims to serve clients from seven states that fall under the 500 kilometer radius and is expected to generate up to 50,000 jobs. With jobs, a spike in the development of residential real estate in the port city will follow.

Know more about real estate in and around Hyderabad here.