Real estate players in Andhra Pradesh see the recent political turmoil in the state as a temporary phenomenon.
Though the agitations for separate Telangana and unified Andhra has resulted in reduced customer interest in Hyderabad and its surroundings, Visakhapatnam and adjoining areas are witnessing more enquiries.
The players, however, said sales would neither plummet in Hyderabad nor would they spurt in the coastal city.
According to Hari Challa, managing director of Aliens Group, the turmoil in the state last month resulted in lower site visits. “But, this will only delay the decision for closing the transaction and will not result in it being put off all together,”' he said.
The company is readying its Aliens Space Station, a 30-floor residential complex near Gachibowli in Hyderabad. It takes prospective customers to the project sites on weekends. There are about 45 site visits a day. But, the tense situation last month saw the number of visitors to the site drop 50 per cent. “Normally, ten percent visits get converted into sales,” he said.
The project comprises 2,182 flats, of which 1,500 belong to Aliens and the remaining to the landlord. So far, the company has sold over 50 per cent of its flats and is optimistic of selling the rest during this fiscal.
The present rate is around Rs 2,900 per sft and varies with the payment schedule of the parties. Each unit costs Rs 35-40 lakh, he said, adding the company was firming up plans to expand its operations to Bangalore, Visakhapatnam and Chennai among others.
Another Hyderabad-based company Indu Projects Limited is in the process of handing over the properties at Indu Fortune Fields, a 70-acre gated community near Hitec City.
“It is only a matter of time for the dust to settle and for the growth story to continue,” said S Prakash V Yadav, general manager (sales and marketing), Indu Projects, adding Hyderabad had grown beyond geographical issues.
However, in view of the present situation, the company is going slow on its future project. “There are a few projects in the pipeline. It will take some time, say a couple of months, for us to launch by which time the uncertainty will be over,” he said. The company has projects in execution or planning stage only in Hyderabad and will soon enter the Bangalore market.
Hyderabad, Vijayawada and Visakhapatnam contribute 60 per cent of the revenues to the stamps and registration department. “The recent agitations will reduce the number of transactions in these cities and therefore the revenues will also take a hit,” said B Aravind Reddy, state registration and stamps commissioner and inspector general.
Hit by the recession, the department has so far collected 72 per cent (Rs 2,321 crore) of the Rs 3,224 crore target set for the financial year 2009-10. “The market conditions are not conducive now to reach the target,” he said.
According to MVV Satyanarayna, chairman of Visakhapatnam Apartment Builders Association and owner of MVV Builders, there has been a steady increase in enquiries for flats at Iskathota, Pedda Waltair, Gopalapatnam, Repagunta and Madhurawada and adjoining places in Visakhapatnam for smaller properties - one and two-bedroom flats.
The company is executing two projects near King George Hospital in Vizag.
Realty prices, which dropped 25-30 per cent over the last one year in Vizag on account of the recession, continue to remain at the same level despite increase in enquiries. Flats in the city limits range from Rs 2,600 to Rs 3,500 per sft and from Rs 1,800 to 2,300 sft on the outskirts.
The slump reflected in the fact that the district earned less than 50 per cent of the set target of Rs 235 crore revenues from stamps and registrations in the first three quarters of 2009-10. “We realised only around Rs 90 crore till November end,” said Venkateswara Rao, district registrar, Visakhapatnam.
The enquiries in the last two weeks were primarily for lands, said DRK Raju, builder and a real estate dealer. “Several real estate developers would now plan more projects as the beach city already as infrastructure including an airport in place to attract investments in the long run,” he added.
Trade circles said 5 million sft space in the state was ready for occupation and construction work on another 50 million sft was in progress.
