CommonFloor A Realty Study Introduction

Figure 1 Vijayawada location map Major residential areas with major listings as per CommonFloor data have been highlighted using circles around them. The city railway station is also market here. Major roads are indicated in 'yellow' and water bodies in 'blue'. The city limits are marked using 'broken lines'. City Overview Economy Vijayawada is a commercial city located in The city's wholesale trade is mostly restricted to iron of and is situated on the banks of the products, pharmacy, fertilisers, cereals, pulses, edible . Historically, it was known as Bezawada, and products, mango exports and metal, among others. The is also known as 'The Place of Victory'. It has been Real estate market of Vijayawada is also a significant recognised as a Global City of the Future by McKinsey. contributor towards the city's economy. Property prices in the city are comparable with any top city in the country After Visakhapatnam, it is the second largest city in with an average appreciation in prices to the tune of Andhra Pradesh with an area of approximately 61.88 about 1.1 per cent. sq.km. As per the 2011 census, the city has a population of about 1,048,240. It comprises 3 per cent of Krishna Industrial Sector district's total geographical area and about 33 per cent of Some of the major industries in Vijayawada include Agro the district's population. The GDP of the city is about $4 products processing, textile, hardware, automobile, billion and is expected to grow to about $17 billion small-scale industries and consumer goods, among (1,02,000 crore) by 2025. others. Transportation Hub Agro-based industries Besides being rich in agriculture output, the city is also a Vijayawada being a prominent hub for agriculture, has prominent industrial transportation hub, with one of the many agro-based industries like turmeric, cotton and largest railway junctions in . According to the Urban tobacco. Besides, it also has many rice, oil and dal mills. Development ministry, Vijayawada is the cleanest city in Andhra Pradesh. The city is surrounded by the Krishna River on the east and west and the Budameru River on the north.

Transportation The realty sector of Vijayawada has achieved a growth rate of about 23 per cent in about a decade, from 2001 to a. Road 2011. The city which was earlier an industrial and Vijayawada is well connected to the rest of the country business hub is steadily shifting its focus to other through some major National highways. Two important industries like IT/ITeS, automobiles, biotechnology, National highways that pass through the city are the NH- engineering, pharmaceuticals, retail banking, insurance 16, between Chennai and Kolkata and the NH-65 between and financial services as well as telecom. This will result Machilipatnam and Pune. Incidentally, the NH-16 is part in increased employment opportunities in the city of the Golden Quadrilateral project which is being thereby necessitating more residential requirements. undertaken by the National Highway Authority of India (NHAI). Moreover, the NH-30 connects the city to Besides, the Gannavaram Airport is proposed to be Jagdalpur in Chattisgarh. The Vijayawada Municipal developed into a full-fledged international airport so as to Corporation (VMC) is also planning to introduce Bus Rapid improve accessibility to the city. This is also set to Transit System (BRTS) buses with dedicated bus corridors. enhance the realty market in the area due to the development of improved infrastructure facilities in the b. Rail vicinity. Vijayawada has a medium level of real estate The Vijayawada railway station is located about 6 km west transparency3 among all major cities in India. Incidentally, of the heart of the city and is an important junction along real estate transparency is an indicator of the real estate the South Central railway zone. It enjoys an A-1 status activity in a market. among railway stations in India, and is located along the Table 1 Top 5 popular areas based on demand for Howrah-Chennai line as well as the Delhi-Chennai line. Apartments (sale) After Howrah and Mumbai, it is the busiest railway station in the country handling more than 320 trains, both S No Area Apartment Supply passenger and freight, per day. Some of the other railway (in per cent) stations in the city include Madhuranagar, Gunadala, 1 Benz Circle 10 Rayanapadu, Kondapalli, Nidamanuru, Krishna Canal, Ramavarappadu, Kolanukonda, Mangalagiri and 2 Gunadhala 9 Gannavaram. 3 Poranki 8 c. Air 4 Bhavani Puram 6 Vijayawada is well connected by air to other important 5 Kanuru 5 destinations across the country. The Vijayawada Airport is Source: Real Insights by CommonFloor.com located about 18 km east of the heart of the city, at Market Segmentation based on residential property Gannavaram and operates domestic flights across the type demand country. From Vijayawada there are daily flights to important destinations like Hyderabad, Chennai, Bangalore, Mumbai, Jaipur and Delhi. Plans are on the Apartments anvil for the expansion of the airport which will facilitate the landing of larger aircraft besides enabling night Individual houses landing of flights. Villas Real Estate Market Analysis Vijayawada has many important micro-markets with high Plots realty value. They include Satyanarayana Puram, Vidhyadharpuram, Gollapudi, Tarapet, Governorpet, Machavaram, Bhavanipuram, PNT Colony, Enikepadu, Figure 2 Distribution in demand for different categories of Kanuru, Rajarajeshwari Peta and Payakapuram, among residential property others. The most commonly seen residential units in Source: Real Insights by CommonFloor.com Vijayawada are 2 and 3 BHK apartments. The area of According to Figure 2, demand for apartments is apartments here ranges between 1000 sq. ft. and 2500 considerably higher compared to other residential types. sq. ft. while prices range between Rs 30-75 lakh. This is primarily due to the availability of different types of facilities in the vicinity of such projects besides the Figure 4 shows that re-sale apartments in Vijayawada are amenities that they provide to residents. more in demand that new ones. This is primarily due to the cost advantage that such units offer compared to new Market Segmentation for Apartments based on Status ones. Market Segmentation for Apartments based on Pricing

55.00% Affordability (10- Completed 7.02% 30 L) Upcoming Mid-range (30-60 57.89% L) 45.00% 7.02% Luxury (60 L- 1 Cr 28.07% ) Ultra-luxury (>1 Cr ) Figure 3 Distribution of apartments based on their status Source: Real Insights by CommonFloor.com Figure 3 suggests an increase in the proportion of Figure 5 Distribution of apartments based on price range upcoming apartments. The market for apartments in Source: Real Insights by CommonFloor.com Vijayawada has expanded considerably in recent times As per Figure 5, it can be seen that the demand for Mid- due to many residential projects coming up that offer a range apartments is comparatively higher than for other wide range of facilites. The supply is gradually picking up categories. It includes both first sale as well as re-sale so as to cater to this rising demand. Being touted as the apartments. This is primarily due to the fact that the price new capital, the city is gradually moving out from the range for this category (30-60 lakh) is within the shadows of Hyderabad and is becoming a force to reckon budgetary reach of a majority of buyers. Besides, within with in real estate. this price range buyers can expect to buy 2 as well as 3 Some of the important completed apartment projects in BHK apartments with requisite facilities and amenities. Vijayawada are MVR Gayatri Residency by MVR Builders, The affordable price range (10-30 lakh) has also many Sri Krishna Towers by Krushna Sai Housing and Bhavit takers, primarily for those who are budget conscious and Harivillu by Bhavit Housing, among others. There are also require only basic amenities. The market for luxury and many prominent upcoming residential apartment ultra-luxury apartments is minuscule as it is still in a very projects here like Vijay Sai Enclave by MBMR Real Estate, nascent stage of development in Vijayawada. Lakshmi Venkateshwara Gardens by STBL Projects and In the Mid-range category, about 67 per cent of Tonia Heights by Vishnu Builders, among others. apartments are 2 BHK units while about 30 per cent are Market Segmentation of Apartments based on the Sale in the 3 BHK category. In the Affordable category, about Type 92 per cent are in the 2 BHK category while about 5 per cent are in the 3 BHK category. In the luxury category, about 67 per cent are in the 3 BHK category while about 22 per cent are in the 2 BHK category. In the Ultra-luxury 60% category, about 89 per cent of apartments are 3 BHK units First sale while about 11 per cent are 4 BHK units. Re-sale

40%

Figure 4 Distribution of apartments based on the sale type Source: Real Insights by CommonFloor.com Market Segmentation for Apartments based on BHK Market Segmentation for Apartments based on Rentals configuration

27.00% <5000 30.00% 7.00% 5000-10,000 2 BHK 10,000-15,000 4.00% 1.00% 3 BHK 1.00% 15,000-20,000 64.00% Others 66.00% 20,000-25,000

Figure 7 Distribution of apartments based on different rental categories Figure 6 Distribution of apartments based on BHK configuration Source: Real Insights by CommonFloor.com Source: Real Insights by CommonFloor.com As per Figure 7, the rental category which most As per Figure 6, it can be seen that 2 BHK apartments are prospective tenants prefer is that between Rs 5000- in demand by an overwhelming margin compared to 10,000. This is followed by the category between Rs other configurations. As expected, it is followed by 3 BHK 10,000-15,000. For the rental category between Rs 5000- units. Other configurations have a minuscule 10,000, it can be seen that about 87 per cent are 2 BHK representation. The demand for 2 BHK apartments is high apartments while 13 per cent are 3 BHK units. because they are cost-effective in the sense that with the budgetary limit of most buyers, they provide the Market Segmentation of rental apartments based on necessary features required by its residents. As per Figure BHK configuration 5, it was seen that most of the 2 BHK units come under the Affordable and Mid-range of apartments for which there is considerably more demand. Hence, from both

Figure 5 and 6, it can be inferred that most apartment 26.00% buyers in the city prefer such apartments combining both 2 BHK these aspects. 3 BHK The value of 2 BHK apartments between 800 and 1500 sq. 74.00% ft. here ranges between Rs 20-70 lakh. For 3 BHK apartments sized between 1500 and 2000 sq. ft., values range between Rs 60 lakh to 1.2 crore. Figure 8 Distribution of apartments based on BHK configuration Top 5 popular areas in Vijayawada for rental demand for Source: Real Insights by CommonFloor.com apartments Evidently, it can be seen from Figure 8 that the demand Table 2 Top 5 areas for rental demand for apartments for 2 BHK rental apartments is considerably higher than S No Area Rental Supply (in that for 3 BHK units, where demand for other unit types per cent) are conspicuous by their absence. Combining both 1 Ramavarapupadu 16 Figures 7 and 8, it can be inferred that most of those looking for rental apartments are from different middle 2 Benz Circle 16 class sections with lower disposable incomes. 3 Autonagar 7

4 Bharati Nagar 7

5 Vidhyadharpuram 5

Source: Real Insights by CommonFloor.com

Prospect of Vijayawada as new capital on Future Prospects realty Considering that Vijayawada is a front-runner for being Vijayawada is one of the strong contenders for being declared as the new capital of Andhra Pradesh, the future developed as the new capital of Andhra Pradesh. Besides prospects of it being developed as a prominent city in the being centrally located, it is also easily accessible to major region is quite bright. Even if the city eventually does not national highways like the NH-5 and NH-9, thus offering get the nod, being a prominent city, the prospects of it good connectivity to other cities and states. Vijayawada is being further developed are high. The real estate market also renowned being a major automobile industry hub. of the city is also expected to grow considerably which What sets it apart from other major cities in the state like could result in major developers embarking on Vizag is its railway connectivity. With one of the largest prestigious residential projects in future. Investors are railway stations in the country, it provides excellent intra- also expected to get healthy returns on their investment, city connectivity. whether from land or through rental returns. ------X-X-X-X-X-X------References

1. http://www.ficci.com/spdocument/20225/Re-orienting_Real_Estate-3Aug2012.pdf

2. http://www.indostarrealty.com/images/Seemandhra%20Capital%20Race.pdf

3. http://www.joneslanglasalle.com/ResearchLevel1/research_india_30_real_estate_opportunities_in_tier_III_cities.pdf ------CommonFloor.com maxHeap Technologies Pvt Ltd #298,299 SGR Towers 7th Cross, Domlur, Bangalore - 560071. ------Authors Ranjan Joseph Priyanka Kapoor Meha Singla Research Associate Chief Editor Manager Research ranjan.j @commonfloor.com [email protected] [email protected] Bangalore Bangalore Bangalore

------Disclaimer: The document above is written by the Domain Research Team at Commonfloor.com, India’s fastest growing real estate website known for its unbiased prognosis in Real Estate sector. The information provided in this report is based on CommonFloor data which is collected from various publicly known sources viz, websites, documents and maps. It should be considered as a guideline and not in absolute certainty. While care has been taken for groundwork, no responsibility is accepted for the accuracy of whole or any part. This information is confidential and the sole property of CommonFloor.com. It should not be reproduced in any form, in part or whole, without prior permission.