Posted on 10th October, 2013 by admin

Builders assess investments in the past few weeks could be around 1,500 crore

Land in demand: With Hyderabad's future as an economic powerhouse being uncertain, investors in the property market see Bangalore as a safe bet.

Bangalore is seeing heavy investment from Andhra Pradesh (AP) investors in the real estate sector, thanks to the Telangana crisis and the uncertainty over Hyderabad’s status.

The flight of capital from Telangana, Andhra and Rayalaseema regions of the neighbouring state to Bangalore is real, quick and large and is coming in from investors of all dominant communities.

The investment in Bangalore’s real estate from Andhra Pradesh in the last few weeks has been assessed at a whopping Rs 1,000 cr-1,500 crore by Bangalore’s builder community.

The Telugu investors, Reddys, Kammas and Naidus, pre-dominantly, and a sprinkling of Brahmins, have been investing in land banks, sites, plots, apartments and villas all around Bangalore.

The President of Confederation of Real Estate Developers of India (Credai) Bangalore, R Nagaraj Reddy told Deccan Herald that the Telugu investors have even bought big land parcels of 50 and even 100 acres with the goal of developing the land at a later date. These parcels are being transacted on Bangalore’s periphery.

Says Reddy: “The transactions anywhere between Rs 1,000 crore-1,500 crore have been on for over a month. Even in the last one week, we have been receiving plenty of queries for land from Telugu builders and developers, the Telugu middle-class and even from the industrial class.

Telugu investors feel Bangalore is a safe bet and that Hyderabad is uncertain. The Telangana churning is primarily driving investment into Bangalore.”

“Within Andhra Pradesh, there is uncertainty whether there will be one or two capitals depending on which investments will flow. Vijayawada is being talked about as the potential second capital given its fairly developed status and being one among the five large cities of that state.

IT effect

While builders and developers are going in for land parcels, sites and plots, the middle-class is going in for apartments and NRI’s are going in for villas.

The middle-class are primarily those who work in the information technology sector who have been migrating to Bangalore since the Nineties, but are migrating more now, given changed conditions in Andhra Pradesh. The apartments being bought range from Rs 35 lakh to Rs 65 lakh.

NRIs find the City safe

The Telugu NRI’s are also into IT in the US and they see only Bangalore as a safe option to invest their dollar savings, say builders.

As they can afford it, Bangalore’s developers are getting queries from the NRIs about villas in Bangalore. A large and luxurious villas cost anywhere from Rs one crore to Rs five crore.

Local builders also say that such investment in real estate is to secure the future of the younger generation of Telugus who estimate that Bangalore’s IT sector will continue to grow and lead all other metros, including Hyderabad.

Employment prospects are high in Bangalore and settling down here requires property. To precisely enable their children to settle down permanently in Bangalore, Andhra Pradesh investors are rooting for long term land investments, they say.

Source: Deccan Herald on 10th October 2013