A lot of people we meet nowadays have the apprehension of what happens to Hyderabad's real estate market if a lot of people divided on regional lines where to sell their investments in the city. This question, to us, seems more rhetorical in nature, due to the recent developments.

We have tried to analyse this point a little more:

• A real estate market is always made of adequate number of buyers and sellers at agreed prices for new and resale properties. Markets functions normally provided the overall economy is not disturbed by extraneous factors.
• A real market slows down when this equation gets skewed. This could happen due to recession when buyers are less and sellers are more. An exact opposite happens during boom when buyers are more and sellers are less.
• In Hyderabad's case post 2009 it was only the bifurcation issue which kept pulling the market down.
• Post clarity the commercial leasing market has started seeing leasing action. We have been tracking the recent commercial deals / developments / occupancy levels on our LinkedIn group "Hyderabad Commercial Real Estate Development". The commercial market has recovered substantially and is poised for growth now. New companies are coming in and existing companies are growing fast.
• Commercial market growth is first step and this would be followed by similar action on the residential and retail fronts. All these sectors are aligned to a large extent.
• An indication of improving sentiments is that a lot of investors, financial institutions, HNI's, REIT's, corporates have already started to re-evaluate the Hyderabad market and are expected to take investment positions shortly.
• The clarity is beginning to have the expected positive effect on the market. Even on the residential side end users are slowly coming back in the market and have started to look at available transactions.
• In the current scenario if the market has some resale sellers vying for commensurate buyers at agreed valuations then probably nothing else can give a better boost to the city's real estate market.
• Some of these sellers had the foresight to remain invested in the city for close to 2 decades. Investments of couple of lakhs made 15-20 years back in small 500 sq yds plots in Hitech have grown in valuations to a couple of crores today.
• Such increased sale / purchase activity could act as a blessing in disguise for this market. This could have an immediate positive impact on the real estate market and could help the market get back on track in the short to medium term.

We can go on discussing the above and still find opinions will remain divided. We feel the more relevant point to be discussed is how the two new states can work together for each other's mutual benefit.

Is it possible to work together? One cannot deny the fact that both the states are inextricably linked economically and more importantly socially. Both can benefit each other the most especially since both the governments seem to have embarked on an investment attraction spree. The economic and social connect between both will only grow in future hence it is more important to work together for mutual economic prosperity & better social atmosphere.

It is clear that unhealthy competition between both states will only benefit other states. No other state stands to lose anything if both the two new states do not work together. On the contrary only both new states have everything to lose if they continue to fight. Normally most investors / business houses want to project a neutral image in terms of their investments / outlook. Such cautious investors may choose the safer route of investing elsewhere than be caught in the crossfire of choosing either of the two new states.

Is it possible to work together? Yes, it is quite possible. For doing this one needs to focus only at the positives pertaining to both the states.

When investors invest in new projects in different geographies they are looking for the following:

• Availability of land, power, water, road connectivity, access to raw materials etc.
• Availability of skilled manpower.
• Availability of immediate catchment market for their products & services.
• Availability of a particular region as a market. Incase the new setup is anywhere in south India then they want to cater to the entire southern region.
• Services based industries require quality city infrastructure, Grade A buildings etc. within metros to start their activities.

To work together both states would have to work on a major investment project together. We feel that apart from services, manufacturing sector should be the focus area for both the states. Manufacturing has to be spread across to get better traction from various investments.

One way of doing this could be to work on a model of opening the Bangalore - Hyderabad - Vijaywada section as an industrial / investment corridor on the same lines of similar corridors existing between Delhi - Mumbai or Bangalore - Chennai or Amritsar - Kolkatta or Vizag - Chennai.

These corridors had to be established because respective city's planners / governments realised that both the cities involved needed each other to sustain & grow further. Accordingly growth of both Mumbai & Delhi are linked and so is the case of Bangalore & Chennai or the other cities.

To develop the Mumbai - Delhi investment corridor, Delhi Mumbai Industrial Corridor (DMIC) was conceived, by the central government. This corridor is being developed as a model industrial corridor of international standards with emphasis on expanding the manufacturing and services base and develop DMIC as the 'Global Manufacturing and Trading Hub'.

A specific company i.e. Delhi Mumbai Industrial Corridor Development Corporation Ltd. (DMICDC) has been set up which undertakes project development services for investment regions / industrial areas/ economic regions/ industrial nodes and townships, for various central government agencies and also help in assisting state governments. The vision of DMICDC is to create strong economic base with globally competitive environment and state-of-the-art infrastructure to activate local commerce, enhance foreign investments and attain sustainable development.

In the current case feel a strong case rests for creating the Bangalore - Hyderabad - Vijaywada Industrial & Services Corridor.

Some positives are as follows:

• 2 of the cities in this corridor are state capitals and 3 is likely to be one.
• The airports, bus & railway stations in all these 3 cities have daily mulitple services operating passengers between Bangalore - Hyderabad & vice versa and Hyderabad - Vijaywada & vice versa, practically every hour of the day. Most of this traffic is for inter-city business.
• 2 international quality airports have been developed in this corridor in Hyderabad & Bangalore. Hopefully the Vijaywada airport would also be upgraded soon.
• Good road connectivity exists between all these 3 cities. The toll roads are complete and functional. The drive is good, fast and reasonably safe.
• Good rail connectivity exists between these cities. It is a likely corridor on which the bullet or hi-speed trains could be made operational due to the high demand for inter-city travel.
• Ample amount of vacant land is available in this corridor. Most of this will remain affordable.
• This corridor should have adequate power.
• Couple of rivers pass through this corridor.
• This corridor passes through Coastal Andhra, Telangana, Rayalseema and Karnataka's eastern side. Most the catchment areas need development and are currently reasonably backward.
• This corridor will see development of 2 Information Technology & Investment Region's (ITIR) i.e. Hyderabad & Bangalore.
• Hyderabad has an ORR around it, Bangalore has part of its western and southern side serviced by an ORR and likely to cover the balance. Vijaywada seems to also planning for an ORR.
• We feel a lot of development in Bangalore is getting pushed towards it's northern side towards Hyderabad.
• In Hyderabad a lot of development is likely to happen along the Bangalore highway and close to the airport. The Bangalore highway section is likely to develop as a FMCG corridor with investments like P&G, J&J and 3F Fuji oils done for this part of the city.
• The Hyderabad - Vijaywada highway would be a preferred corridor since investors can cater to both the markets with ease.

The two new state governments should immediately start cracking on discussing with the Karnataka government and get ground work explored for such a corridor. This kind of an investment / industrial corridor has the potential to rival the Delhi-Mumbai corridor. We hope the governments will concentrate on such important investment plans which will have a great effect on the entire region. Hopefully it will be realised that together we can grow better and faster.