SEZ causes farm realty boom in Vizag

Agricultural land prices in Visakhapatnam have more than doubled in the last two months. The rise in agricultural land prices is not just restricted to Visakhapatnam but has extended to the neighbouring districts of Vijaynagaram and some parts of Srikakulam.

The rise in land prices is attributed to the money flowing into the hands of farmers thanks to the land acquisition drive by the state government to create a special economic zone (SEZ). The state government is paying close to Rs 1.5 lakh per acre to farmers as compensation for acquiring land earmarked for the SEZ.

The state government has acquired about 9,000 acre of farmland to set up an SEZ at Achuthapuram, near Visakhapatnam district.

Farmers, whose lands were acquired by the government, are now looking at putting in their money on agricultural land. The road repair works taken up on several rural roads have also ensured that farmland prices have increased between 50-100 per cent this year .

Due to the heavy demand created by this category of people, prices of farmlands in interior areas have also gone up.

"Just eight months back, nobody was interested in my five-acre holding for even Rs 20,000 per acre. But, last week the same land was bought by a person who had sold his land to the state government at Rs 1.05 lakh per acre," N Rambabu, a government employee of Chodavaram area, told Business Standard.

"Farmland prices have increased in the last one year mainly because of the developed rural roads in the villages. Now, the prices have shot up again due to the compensation money being paid for the creation of the SEZ," N Sathyanarayana, a real estate broker told Business Standard.

Real estate prices have also gone up between 50-100 per cent in the 50 km radius of Visakhapatnam this year because of the four-laning of National Highway 5.

The Madhurawada village, 12 km away form Visakhapatnam city and next to NH-5, is now a major attraction for many real estate investors. Just a year ago, sites next to NH "�5 cost only Rs 1,000-1,200 per sq yard. But after the work on the four-laning started, prices have began to go up. Now the same sites have been purchased at prices between Rs 3,000-3,500 per sq yard and several investors are ready to pay even more for these sites.

Eight years ago, the Visakhapatnam Urban Development Authority (VUDA) had developed a huge lay-out in Madhurawada village. Until last year, prices were Rs 400-800 per sq yard depending on the access to the main road. At present, rates have shot up to Rs 1,200-2,500 per sq yard in the VUDA developed lay-out.

Interestingly, some opportunists who had bought sites from VUDA but had not registered them are now selling them at a premium.

"VUDA had developed a layout in a remote area called Kapuluppada, about 20 km from Vizag city, some eight months back. VUDA had allotted about 300 sites at Rs 400 per sq yard. Some of the purchasers have not yet registered their sites and now the allottees are making a killing by reselling these at Rs 900-1,000 per sq yard," a real estate source said.

VUDA has in the last two years developed several layouts around Visakhapatnam including areas like Aganampudi, Vepagunta, Pendurthi, Madhurawada, Anakapalli, and Vijaynagaram.

Another reason attributed to prices going up is the auction route followed by VUDA in selling these plots. Because these layouts are sold on an auction basis by VUDA several NRI investors have been bidding at very high prices in these auctions driving prices up. Depending on the prices that prevail at the auctions, private real estate developers are also quoting similar prices.