The Evolution of the

Indian Economy
The Indian economy, initially evolved as an agricultural
economy and is now being driven by the services and
manufacturing industries. It experienced robust
expansion, with a GDP growth of 9.4% and a per capita
income growth of 8.4% in 2006–2007. The service
industry contributed 61.8% to the GDP in 2006–2007 and
hence is the primary economic driver of the country. The
service industry, or the 'tertiary sector', covers a wide
gamut of activities like trading, banking and finance,
infotainment, real estate, transportation, security,
management and technical consultancy, among many
others. However, the information technology (IT) and
IT-enabled services (ITeS) industry cater to all these
sectors, and hence it is the leading sector in the service
industry that drives the Indian economy.
Revenue Growth of IT/ITeS Industry in India

Contribution of the 60

IT/ITeS Sector to the

Our research has identified new economies and geographies that have displayed sufficient growth to be placed
on the radar of domestic and international occupiers, investors and50 developers. These cities will become the

Indian Economy
benchmark for hyper real estate development over the next decade. With rising population, increasing income
levels, improving infrastructure and government funding, these Tier40 III cities have strong long-term economic
Revenue in USD billion

prospects and will offer multiple property market opportunities. 30

The Indian IT story goes back to the 1950s, when IBM
This the
had hyper growth
virtual will beofaccompanied
monopoly by some challenges.
computer development and We have 20 identified the following challenges that
could become ‘road blocks’ in the face of development.
distribution in the country. But the IT revolution and major
10
developments were only triggered in the 1990s with the

Infrastructure
liberalisation of policies. The continuous and fast growth
of the IT sector over the past decade can be attributed to
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

the efforts of the Indian government to constantly Domestic Market Exports Total Revenue
The lack of
stimulate thequality
growthinfrastructure
of the sector in byIndia is not
offering only affecting economic growth, but also
incentives exerting monetary
Source: NASSCOM – IT Fact Sheet, August 2007
pressure.
and For instance,
tax benefits inefficient
to occupiers, ports andand
developers burdened airports are adding to the operating costs of corporate India.
investors.
WithIT/ITeS
The rising urbanisation
industry is and more people
an important partaspiring
of thetoIndian
settle in major cities, there is a rising pressure on the existing
supportindustry
service infrastructure. There hasabout
and contributes been 5.4%
an exponential
of the GDP. growth in the number of cars and airplanes in the country,
IT Industry Contribution to the Indian Economy
but without
With a corresponding
the IT exports growthUSD
figure touching in airports and roads.
31.9 billion and
the domestic market growing to USD 15.9 billion in 2007, 6.0% 1.8
The IT/ITeS
the Indian government recognises the
sector is undoubtedly theneed for the growth of infrastructure
fastest-growing 5.0%
and has earmarked large investment 1.6

over the innext

industry four
India. It to five years.
aspires MajorUSD
to achieve investment
60 billionis inexpected 4.0%
to be deployed in some key sectors such 1.4
1.2
as
highways, civil aviation, seaports and railways both by the government and the private sector. The state of
Millions

exports by 2010 . As shown in the adjacent graphs, the IT

1
3.0%
1
Andhra Pradesh
industry growth is has initiated
being infrastructure
fuelled by expansion developments
in domestic such as 2.0%the development of a new international airport, 0.8
0.6
a mass
and rapid transport
international markets. system, flyovers in Hyderabad; upgradation of existing airport, proposed second 0.4
1.0%
international airport in the state and a new seaport in Visakhapatnam; expansion of the airport in Vijayawada; 0.2
0.0% 0
improvements of state highways to improve connectivity with larger cities such as Bangalore and Chennai.
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

% in GDP Direct Employment

Source: NASSCOM – IT Fact Sheet, August 2007

Strategic Review 2006, NASSCOM

1
 Rising Competition
Overview and Contribution of the
State of Andhra Pradesh to the
The Indian real estate market is not only growing in terms of pace, but also in scale. Real estate growth engines

Growth of the IT/ITeS Sector

are no longer in cities like Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Kolkata and Pune. The smaller cities
are now expected to be the growth drivers over the next decade.
More than a dozen Tier III cities shall compete with each other to attract developers, investors and occupiers.
We foresee
Andhra government
Pradesh was rated support
as 'thetohigh-tech
be one of the prime
capital of differentiating factors that will catapult certain cites
over others. The small cities in the state
the sub-continent' according to the National Geographic of Andhra Pradesh will have an advantage due to relentless
government
in its article support.
entitled ‘Emerging Global Cities of the
World’. The state earned the fourth highest revenues in
The
IT state government
exports of about INR has1.85
a vision for(USD
billion select4.5
cities, and it is evident from the fact that critical departments such
billion),
as the Urbanfor
accounting Development
about 15%Authority
of the and totalMunicipal
IT/softwareCorporation are working in tandem towards the progressive
development
exports of theof their city. Most cities have a well-defined master plan, and active development efforts are under
country.
way led by public and/or private enterprises.
Software exports contribute to more than half or about
53% of the state’s total exports, while the service

Human Resources
sector already accounts for 43% of the GSDP2 and
employs 20% of the total work force in the state.
Andhra Pradesh has invested a total of INR 190 million
towards the development of infrastructure to support
Availability of skilled labour will be a challenge going forward as more and more corporates try to attract the labour
the service industry, with 185 domestic firms and MNCs
pool. It is becoming increasingly difficult to find and retain talent with relevant experience. Although India has the
already operating in the state.
highest percentage of youth population, a small percentage of them are educated to manage mid-level to
senior-level operations. Further, the percentage of those with relevant field experience to take on the scale and
The IT revolution in the state of Andhra Pradesh started
pace of growth is very low. To tackle this situation, many corporates are looking at surrogates or closely matched
in the late 1990s when the state government signed an
industries to attract talent. Corporate India is also tying up with leading institutions to set up specialised courses
Memorandum of Understanding with Microsoft. This
aimed at exposing current and potential employees to practical methods and operations. Andhra Pradesh is better
triggered a cluster effect, drawing many other software
placed due to the presence of large number of graduate and post-graduate colleges and institutions mentioned
MNCs to follow suit. During the same period, because
earlier in this report.
of the incentives offered by the government, the state
also witnessed the mushrooming of a host of software
Andhra Pradesh has huge development potential with Hyderabad as an important IT hub followed by
entrepreneurs that started operations.
Visakhapatnam and emerging cities like Vijayawada and Tirupati. The future cities like Warangal, Kakinada
and Cuddapah are also set for development. The state’s initiatives and strategies for infrastructural
The success of Andhra Pradesh can be attributed to the
development, human resource development and policy framework to support and attract investments are
proactive initiatives of its government and the state's
expected to place it firmly on the global business map in the coming years.
potential to sustain long-term IT growth. The first
initiative promoted by the government was the
development of Hitec City in Hyderabad, which has
been transformed to become the prime IT hub not only
of the city and the state but the whole country today.

Growth of IT Exports in Andhra Pradesh

200

180

160

140

120
INR in billions

100

80

60

40

20

97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07

Exports

2
Gross state domestic product
 The future
cities -
Warangal,
Cuddapah
and Kakinada
Warangal has the advantage of being close to Hyderabad and has a good work pool due to the presence in the
National Instituteofofthe
In the scenario Technology (NIT). Thegrowth
strong economic city is growing along NH-202.
of the country, The of
the state proposed
Andhra IT SEZ is in
Pradesh hasthebeen
westvery
at Hanamkonda.
proactive Cuddapah
to attract lies along
investment NH-18, and
in various the government
sectors like IT/ITES,is pharmaceuticals/biotechnology
taking many initiatives to developtothe area a
provide
for
business-friendly environment. The state offers policy support to facilitate the investment. It also hasa the
IT/ITeS. Kakinada has the advantage of being close to Visakhapatnam. The city has a seaport and has
planned
advantagefoodofprocessing SEZ. The
a good talent poolcity is growing
and along NH-214.
infrastructure in terms of connectivity, power, water supply and
communication. Andhra Pradesh is one of the leading regions in the country to implement e-governance across
multiple disciplines. The concept of ‘e-seva’ was first introduced in the state. It is a one-stop destination where
commoners can pay their utility bills and complete other municipal activities. The social infrastructure in the

Warangal
state's cities and towns is also good. The key factors attracting investment in the state are the following:

Policy Support
Population- 579,216
Literacy rate- 58.41%
Average Household size- 4.7
The Government
Languages- Telugu, of Andhra
Hindi,
English
government
Area- has (KUDA)
1805 sq kms formulated a new
preferred destination of the IT Companies
Altitude- 302 mts above sea level
The state gives declaration as SEZ3 status to the company or developer
Climate-Warm Dry
non-agricultural land of more than 10 hectares or 25 acres and adhere to the
Average Temperature -
of India. Sinceo the SME 4
Summer
exclusive– 23.2
space c –for
39.6 o
c
these
Winter – 13.5oc – 30oc
Technical Universities - 2
Major Universities -
National Institute of Technology
Kakatiya University
YoY Engineering Graduates –
OU Region – 53,365
Air connectivity -
Domestic Airport at Mamoor
Nearest International airport at
Hyderabad, 130 kms away
Road Connectivity-
NH 202 passing through the city
Key Development
• Warangal is within a distance of 130 Kms
APSRTC for interstate , intercity from Hyderabad – the prime IT Hub. This is
Pradesh
has given
and intracity a strong policy support to attract investments in the state. The
connectivity the major advantage for the city. It has
ICT Policy 2005-2010 to make Andhra Pradesh the most attractive and
Rail Connectivity-
potential
in the world. The state also provides thetoITwitness a satellite
companies withtown growth
incentives.
Good connectivity ; major railway
who due
of Hyderabad ownto free hold,
the spill overtitle
of IT free,
station at Kazipet
Rules of SEZ
developments ofAct
the 2005
city. of Government
Good water and power supply
companies have difficulty in acquiring 25 •acresThe ofcity
land,
has the government
general unorganised will provide
retail
SMEs inGood
the telecom
APIIC SEZandatinternet
Kokapet, Hyderabad.
connectivity growth and low rise residential
Recreation: The city has movies, developments.
theatres and restaurants for • One notified IT SEZ by APIIC is proposed at
recreation. Hanamkonda.
Hospitality: Only Government
Tourism Hotels
Medical facilities: 3 Hospitals;
Kakatiya Medical College, St.
Ann’s Hospital
Educational facilities: Schools-
300 ; 35 Degree College- 3;
Medical Colleges – 1

3
Special Economic Zones
4
Small and Medium Enterprises
Urban and Rural Infrastructure
Andhra Pradesh has a well-established internal, national and international connectivity.
The state has realised the importance of infrastructure in the overall development and hence
is working towards improving and strengthening urban and rural infrastructure even further.

Connectivity Cuddapah
• Total road network of 178,474 km with about 12 national
highways of 4,014 km and state highways of 8,763 km.
• The major national highways passing through the city
are NH-5, NH-7, NH-9, NH-16 and NH-18.
• Andhra Pradesh State Road Transport Corporation
(APSRTC) provides road transit facility for inter-state,
inter-city and intra-city connectivity.
• APSRTC is considered as the largest state-transport
undertaking in the world.

Population- 262,506 Road Connectivity- Key Development

Literacy rate- 70% • passing
NH 18 The state is the
through thehome
city of the
• headquarters
Cuddapah districtof South Central
has vast Railway
potential in
Average Household size- 4.9 in Secunderabad, Hyderabad.
APSRTC for interstate , intercity mining barites, limestone, dolomite, clay,
Languages- Telugu,English
• The state has four zones among the total of 16 zones of Indian
and intracity connectivityity
Railways which are South Central granite, slabs etc
Railway, Eastas Coast
per theRailway
report - IGNITE-
South
Area- 15,359 sq kms (District) Rail Connectivity-
Western Railways , Southern Railways.the CII study on the industrial potential of
Altitude- 138 mts above sea level Good connectivity
three districts of Andhra Pradesh.
Climate-Tropical Good water and power supply
• The other areas of development are
Average Temperature - Good telecom and internet
Summer- 30.0oc – 44.0oc connectivity horticulture and sericulture.
Winter – 21oc -30oc • The state has six
Recreation: The city has moviesdomestic • airports and one
The report also international airport
indicates potential in
of the
Technical Universities -1
Hyderabad (operational
theatres and local restaurants for
in March 2008).
district in ITeS sector. The government is
Major Universities - recreation. keen to explore this potential and is
Yogi Vemmana University Hospitality: Only local hotels working towards eliminating the existing
YoY Engineering Graduates – mostly 2 star category and lodges challenges of connectivity and other
SVU Region – 13,550 Medical facilities: 2 Hospitals; infrastructure requirements.
Air connectivity - Cuddapah
• The General
statehospital
has four seaports—Visakhapatnam (the country’s second
Nearest airport is Tirupati Airport at Educational facilities:(Entire
largest), Kakinada, Machilipatnam and Krishnapatnam.
Renikunta • Gangavaram
District)Schools- 3789 ;deepwater
Degree port is under development in Visakhapatnam.
It has
College- 17; a cargo-handling
Medical Colleges – 2 capacity of 44.6 million tonnes.It is expected
to be operational this year.

Power, Water and Telecom

• Andhra Pradesh's power sector has consecutively ranked first in
2004–2005 and 2005–2006 as per the CRISIL ratings.
• Andhra Pradesh is the third-largest power utility in the country with
installed capacity of 11,134 MW.
• The state has the highest hydel installed capacity in India, reduces
the cost of power.
• The state's power supply network, which consists of 25,719 circuit
km (ckm) of EHT lines, 207,432 ckm of HT lines, 437,610 ckm of
transmission lines and 2,645 sub-stations, is one of the largest
networks in the country that supplies power to nearly 16,925,194
consumers.
• It is programmed to add 4X400 KV, 5X220 KV and 20X132 KV
sub-stations and 809 ckm of 220 KV lines and 395 ckm of 132 KV
lines. Another 279 33/11 KV sub-stations are being added.

Social Infrastructure
Vijayawada is traditionally a trading town and lies in the prime agricultural bed of Andhra Pradesh. With its main
economic base being agriculture, the city has immense potential for development of food and agro industries. The
government has allocated land at Mangalagiri for the development of an IT SEZ, and another IT park is planned at
Gannavaram. The city is growing along NH-5 with the major growth being along the south corridor of NH-5
towards Guntur. The two growing areas•within
faced by the city is availability of land as mostinofthe
Population- 1,039,518
Literacy rate- 71%
Average Household size- 4.4
Languages- Telugu, English
Area- 1665 sq kms(VGTMUDA)
Altitude- 11.88 mts above sea
level
Climate-tropical
Average Temperature -
Summer- 30oc - 41oc
Winter – 10oc -17oc
Technical Universities - 1
Major Universities -
Nagarjuna University
YoY Engineering Graduates –
AU Region – 27575
Air connectivity -
Domestic Airport existing at
Gannavaran, 16 Kms from city
Road Connectivity-
NH-5, NH-9 and NH 215 are
passing through the city
APSRTC for interstate , intercity
and intracity connectivity
• Andhra Pradesh is called a ‘river’s state’, with major rivers such as
Godavari, Krishna and Pennar providing ample water supply across
the state.
• Nagarjuna Sagar Dam is a masonry dam built across Krishna River
in Nagarjuna Sagar. It is the world's tallest masonry dam at a height
of 124 m and creates a reservoir holding up to 11.472 billion cu m.
• The major projects of the government are Krishna and Rural water
supply projects
• Andhra Pradesh has a good communication network, with 3,341
• Vijayawada
telephone exchanges and 326.4 million of telephone connections.
Optical fibre cable networks by corporate leaders like BSNL (44,500
km), Reliance (6,000 kms), Bharat (3,450 kms) and Tata (1,700 km)
are being planned and will bring a wide range of communication
network to the state.
• The state is in the top quartile of Internet subscribers with 219,000
in 2003.
• The state has a bandwidth of 365 Mbps out of Hyderabad and 100
Mbps out of other cities.
• Postal infrastructure includes 16,213 offices.
Thethe state city
is are
wellGannavaram
equipped with andsuper
Mangalagiri.
specialtyThe
andmajor challenge
specialty hospitals
it iscities
prime of agricultural
Hyderabad,land and privatelyVijayawada
Visakhapatnam, owned. etc.
• The rural health care of the state is good compared to that of other
states but it still needs considerable improvement.
Rail Connectivity- Key Development
Good connectivity ; largest • The city is currently witnessing few
junction of South Central railway developments along the Bander Road
• The state has 20 leading institutes such as Indian School of Business
Water Connectivity- which is the prime commercial and retail
(ISB),
Nearest seaport is Indian Institute of Chemical Technology (IICT), International
Machilipatnam
Institute destination
of Information Technology of the town.
(IIIT),Centre for Cellular and
port at distance of 65 kms
Molecular Biology (CCMB) • etc.
The city currently has Grade B commer-
IT companies – SMEs like UX
• The state has 1,330 arts, science and commerce
cial development colleges,
by local 238
developers.
Group, GSR Technologies,
engineering colleges and• 53 medical colleges.
Two IT SEZs are proposed in the city, one
Efftronics and Essel Software
Recreation: The city has a river at Gannavaram close to the Airport and
side, movies theatres and other at Mangalagiri by APIIC.
restaurants for recreation • L&T is developing the IT tower at
• The
Hospitality: state
The city hascurrently
3 four has quality recreational areas in cities like
Gannavaram and is expected to
Hyderabad and Visakhapatnam.
star hotels with a total of 279 complete by the year end.
• Hyderabad and Visakhapatnam have multiplexes, malls and pubs.
rooms
• The smaller cities in the stateThe
• citycinema
have retail is mostly
theatrehigh
andstreet
local
Medical facilities: 4 private
restaurants for recreation. development along the Bander Road ,
hospitals and 1 government
Elluru Road and NH-5.
hospitals which include Apollo
• 3 malls are proposed to be built in next
Hospital and Manipal Hospital
Educational facilities: Schools- 2 years.
133; Medical
• ItColleges • Most
– 1 state with natural
is a tourism of thebeauty
scenic residential
anddevelopments
pilgrim centres
within
that are rich in culture and history. the city are low rise plotted
• Major tourism destinations are Tirupati, Hyderabad
development. and by local
Few apartments
Visakhapatnam. developers are also there.
• Hyderabad is a blend of old and new cultures, with its 400 year
• The urban development authority has
history with historic monuments such as Charminar, Golkonda Fort
and Hussain Sagar. The latestproposed a township
attraction is Ramoji development
Film City.
• named ‘Singapore
Visakhapatnam is embedded amidst the sea coast and Model Township’
the hills,
making it a good destination for scenic beauty.
within the Amaravati Township at
• Tirupati is one of India’s prime pilgrim centres
Mangalagiri and MS
in a JV with is the abode
Arihant Indoof Sri
Balaji (the reincarnation of Lord Vishnu). It is visited annually by 19
African Infra Developers & Builders Pvt Ltd.
million devotees, who donate about INR 2 billion each year.
• Andhra Pradesh's tourism facilitates tourism facilities with hotels,
lodges and the information needed to plan vacations.
 Talent Pool and
Educational Institutions
Andhra Pradesh has the advantage of a strong work pool which is one of the key drivers of the IT industry. Every
year, the state produces about 350,000 university graduates, 95,000 engineering graduates and 10,078
management graduates. The state contributes to about 23% of the country’s IT professionals. In order to improve
employability of engineering and other graduates and to make them industry ready, Jawahar Knowledge Centres
(JKC) is the flagship programme of the state government.
Tirupati
The key initiatives to improve the quality of education for IT profession are the following:

• International Institute of Information Technology (IIIT) was established by IBM, Motorola, Signal Tree,
Oracle and Satyam in Gachibowli, Hyderabad to train and educate engineers, undergraduates and
post-graduates. It works closely with the mentioned industry leaders to undertake courses to support the
sector.

• Indian School of Business (ISB), in partnership with Wharton School, Kellogg School of Management and
London School of Business is strengthening the work pool in Hyderabad to cater to the global companies.
The other emerging city is Tirupati which is growing along the east towards Renigunta. The city has a low
availability
• Masterof ofland as most
Science in ITofProgramme
the land is (Mellon
for private ownership.
University aimsThe city has atalent
to develop goodtogrowth potential
support as it is close
the requirements
to Chennai and Bangalore.
of IT development.

• Hyderabad is expected to house the second IIT campus of South India after Chennai. Birla Institute of
Population- 303,521Sciences (BITS) from
Technological Chennai and
has planned 240 kms
to build from
its campus on Key Development
a 200-acre land parcel in Jawaharnagar,
Literacy rate- 75%
Shamirpet in the north-easternBangalore
suburbs of the city. • The main economic activity is driven by
Average Household size- 4.4 APSRTC for interstate, intercity the pilgrimage activity. With the availability
•Languages-
AnotherTelugu,significant
Tamil,initiative
English ofand Government of Andhra Pradesh is the Rajiv Gandhi University of Knowledge
intracity connectivity
of human resource and infrastructure, the
Area-Technologies
847.75 sq kms(TUDA)to cater primarilyRail to the educational needs of the meritorious rural youth. The prime objective
Connectivity-
city is looking forward to IT sector for
is to 162
Altitude- impartmtsintegrated educational
above sea level Goodprogrammes
connectivity with broad professional education and soft skills to meet
the industry demands for the rural youth. The course shall commence further
in the economic
academicdevelopment.
year 2008-2009.
Climate-tropical Water Connectivity-
Average Temperature - Good water and power supply • One notified IT SEZ by APIIC is proposed at
Summer - 41 c -45 c
o o
Good telecom and internet Renikunta for IT development.

SEZ Development
Winter – 10oc -18oc
Technical Universities - 1
connectivity
Recreation: The city has movies,
• The retail development is mostly traditional
grocery and general stores along the major
Major Universities - theatres and restaurants for roads. It therefore, has potential for
Andhra Pradesh has
Sri Venkateshwara 40 SEZs approved
University by the central government for theorganised
recreation. IT sectorretail
as ondue31st December
to the high inflow2007,
of
which is highestGraduates
YoY Engineering in the country.
– It Hospitality:
is expected Thetocity
create
has 3direct
star employment of about
pilgrims from800,000 people
all over the world.in next five
years. The total
SVU Region land of 2356 acresand
– 13550 is allotted for these SEZ developments and it is expected to provide a total built
4 star hotels
• It has one mall proposed within the
up
Air space of 97.25
connectivity - million sq ft. TheMedical
SEZs are expected
facilities: to provide international standard IT environment. The state
2 Hospitals;
is expected
Domestic to get
Airport a total
existing at of 71 SEZsRuhiyaamong which 49 SEZs have alreadyTourism
and SVIMS
Temple Township
been notified Projecttoincreate
and expected
overall jobs for 2.5 million people. PPP9 model.
Renigunta 14 Kms from city Educational facilities: Schools-
Road Connectivity- 23;Degree College- 3; Medical • The residential development is mostly low
Tirupati is at a distance of 137 kms Colleges – 1 rise plotted development.
• Emmar MGF is developing an integrated
township in a 140 acre land parcel which
will develop Luxury Villas and Apartments,
Retail and Hospitality.
• In addition to this the Tourism Township
Project in PPP model also plans to develop
Villas and Apartments along with supporting
infrastructure.
• Two four star hotel developments are
proposed.

9
Private Public Partnership
Retail Development Developer: TSI Ventures
Location:
Retail infrastructure in major cities in the state primarily Gachibowli,
consists Hyderabad
of high streets. The mall culture is new to the
state of Andhra Pradesh, similar to the rest of India. Total land area: 12
Hyderabad is acres
the only city that has witnessed mall
development to date. However, the up coming cities inTotal the built-up area:
state will 2,200,000
witness sq ft
mall development going forward.
Hyderabad has six operational malls by local developersType andofhouse
Development : Commercial
mass-market and high-end brands.

Hyderabad is also witnessing the development of malls by reputed national developers such as K Raheja, Prestige
Wave Rock
and IJM. Cities like Visakhapatnam and Vijayawada are also witnessing retail development on similar lines with
local players initiating the development of malls. Apart from this, most cities and towns in the state are
experiencing the development of stores of retail chains like Big Baazar, Reliance Fresh, Subhiksha, More
(previously known as Trinetra, which was bought over by Developer: Emmar
Aditya Birla MGF Spencer’s and Food World.
Group)
Location: Gachibowli, Hyderabad
Total land area: 25.82 acres
Total built-up area: 2,200,000 sq ft
Project Name Developer City/Location Anchors and Brands
Type of Development : Commercial and
Hyderabad GS Construction Integrated
Punja Gutta, Township development
Pantaloon Retail
Central Mall Hyderabad

Emmar Boulder Hills

City- Centre
SEZ Skill Promoters Banjara Hills, Globus, Max, Food
Hyderabad Bazaar, Mc Donald's
and E-zone
Developer: Maytas
GVK 1 Mall GVK Banjara Hills, Shoppers’ Stop and
Location:
Hyderabad Bachupally,InoxHyderabad
Total land area: 74.67 acres
Inorbit Mall K RahejaCorp Total built-up area:Shoppers’
Hitec City, 9,000,000Stop
sq ft
Hyderabad
Type of Development : Commercial and
The Forum Prestige
Integrated
Kukatpally,
Township development
Not decided
Crystal Mall Hyderabad

Maytas HillCounty – SEZ

Residential Development
Andhra Pradesh is witnessing residential development in full swing with international developers joining hands

Cities with potential

with local players across the major cities in the state. Hyderabad, being the prime city in the state has witnessed
quality residential developments by local developers as well as the government forming joint ventures with
international developers. A similar kind of development is proposed and is under different stages of development
for growth in IT
in cities like Visakhapatnam, Vijayawada and Tirupati. The following table shows some noted residential projects
in the state:

Andhra Pradesh envisages sustainable development

Project Name Developer City/Location Anchors and Brands
with focus on development of infrastructure and
talent pool. The state wasHill prepared
County to Master Plans
Maytas Bachupally, Villas and
and comprehensive development plans for emerging Hyderabad Apartments
cities and towns to promote overall development.
IJM Raintree IJM and APHB Kukatpally, Apartments
These initiatives helped the growth of Hyderabad in
major sectors like IT, Biotechnology,
Sanskruti Semiconductor
CESMA and APHB Pocharam, Apartments
Industry and AeronauticalTownship
hub. The major strengths of Hyderabad
the state are the availability of skilled work force and
Casa Koncept Kompally, Villas
good social and physical infrastructure.
Estebana Ambience Group Hyderabad

Apart from the capital city of Hyderabad,

Jurong we have
Jurong Group Rishikonda, Villas
Township
identified the following cities as emerging, which are Visakhapatnam
on our ‘watch list’. These cities have the potential to
Singapore Arihant Indo Mangalagiri, Apartments
emerge as tomorrow’s rising
Modelreal estate destinations.
African Infra Vijayawada
Township

Tourism Emmar and the Tirupati Villas and

Temple Andhra Pradesh Apartments
Township government
 Hospitality Sector
Similar to other sectors, the hospitality sector has its
major presence in Hyderabad. The city currently houses
hotel projects by luxury brands such as Taj Group, Accor,
WelcomGroup etc. All hotel categories from luxury to
budget are present in the city.

Similarly, Visakhapatnam, an important tourist destina-

tion, houses luxury brands such as the Taj Group. Hotels
in the budget sector are managed and operated by local Visakhapatnam
players. Vijayawada, a trading town, also has the
presence of four-star hotels by brands like Welcom Group
and the Taj Group. Local players are also active in the city.
The temple town of Tirupati, one of the most famous
pilgrim towns of India, also has good hotels which are
mostly in the budget category. Apart from the above-
mentioned hospitality infrastructure, most of the cities
and towns in Andhra Pradesh have AP tourism hotels and
lodges.
Visakhapatnam, called the ‘city of destiny’, is being considered as the next destination for investment after
Hyderabad. Madhurawada, which is located north-east of the city along NH-5, is witnessing major developments

Identification of
driven by the IT sector. IT companies have been allocated land in this area to develop and start their operations.
The city has a biotech SEZ and industrial developments like the steel and power plants in the south. The major

Development Paradigm
growth corridor is northwards, along NH-5 towards Vijayanagarm. The main challenge faced by the city is the
availability of skilled human resource.

Andhra Pradesh, being advantaged with strong government support

Population- 1,345,938
Literacy rate- 70.46%
Average Household size- 4.2
Languages- Telugu, Oriya,
English Hindi
Area- 1721 sq kms(VUDA)
Altitude- 5 mts above sea level
Climate- Sub Humid
Average Temperature -
Summer- 32oc -41oc
Winter - 12oc -22oc
Technical Universities - 2
Major Universities -
Andhra University and
Geetam University
YoY Engineering Graduates –
AU Region – 27575
Air connectivity -
Domestic Airport existing
Expansion of airport and night
landing facility in progress
Road Connectivity-
NH-5 passing through the city
APSRTC8 for interstate, intercity
and intracity connectivity
Rail Connectivity-
Good connectivity
and skilled work pool is already enjoying a leadership position as part
Water Connectivity-
of the Indian IT boom. The Keystate
Development
is well equipped with good
Seaport infrastructure
is one of the largest
and in
is working•further
Vizagtowards
is a service city and ison
capitalising well
its major
India called the “Brightest
strengths to makejewel”
it a worthy investment
developeddestination.
with large public sector
of Indian ports can draw ships up companies like NTPC, Vizag Steel Plant,
to depthThe development
of 15.3 mts of Hyderabad on the back of the IT boom has
Hindustan Refinery.
triggered
Good water thepower
supply and growth of other cities like Visakhapatnam and
• The new commercial development is
supply Vijayawada. The active participation of local governments in these
cities and the initiatives taken by at Siripuram
the area with thehas
state government HSBC building
prompted
Good Telecom and internet
collaborative
connectivity development of the cities
as only in terms
Grade A of infrastructure
building. The retail isand
talent pool. This
IT companies – Satyam, Wipro, cohesive development
mostly jointly
high managed
street retail. by different
government bodies has emerged • as are
6 malls theproposed
state’samong
Unique Selling
which 3
IBM Daksh, HSBC, Capgemini,
Proposition (USP) to attract investment across sectors, especially IT.
Kenexa and Infotech are under construction. 3 five star hotels
Recreation: The city has beach, under construction.
pubs and restaurants for • Good quality residential development
recreation. is seen along beach road mostly by local
Hospitality: The city has 3 five
developer. Jurong (Singapore based
star hotels with total of 225
developer) is developing villas at
rooms
Rishikonda.
Medical facilities: 10 private
hospitals and 3 government • Jurong is also coming up with other
hospitals which include Apollo residential projects with Visakhapatnam
Hospital, Care, Seven Hills, Urban Development Authority.
Queen’s NRI Hospitals • International Airport coming up at
Educational facilities: Schools- Rayavaram 60 kms from the city.
458; Degree College-44; Medical • New Seaport at Gangavaram is under
Colleges - 2
construction can draw ships up to a
depth of 21 mts.
• 3 notified IT SEZ – Two by APIIC and
one by Satyam Technologies.
• Unitech has taken up 1,700 acres to
develop a knowledge city adjacent NH-5.

Andhra Pradesh State Transport Corporation

8
 Upcoming Development of IT Parks/SEZs
by Clusters – Hitec City, Gachibowli and
Shamshabad
Projects Developer Location Total Built-Up SEZ/Non-
Area in sq ft SEZ
L&T Phoenix L&T Hitec City 2,500,000 IT SEZ
Info Park

Divyasree Divyasree Raidurg 4,000,000 IT SEZ

Tech Park

Ashoka IT Ashoka Builders Hitec City 1,800,300 IT Park

Park

Emmar Hills Emmar MGF Gachibowli 2,200,000 IT SEZ

Lanco Hills Lanco Group Manikonda 7,850,000 IT SEZ

The IT Revolution Point Indu

TSI Ventures
Indu Group

TSI
Shamshabad

Nanakramguda
7,800,000

2,200,000
IT SEZ

IT SEZ

The Indian IT revolution,

K Raheja also known as the blue-chipHitec
K Raheja revolution,
City started4,000,000
in the early 1990sITwhen
SEZ the economy
entered into theMindspace Corp
phase of globalisation and liberalisation. Factors such as the country's attractiveness in terms of
skilled labour and support infrastructure
K Raheja K Raheja
and the easing of policies for foreign
Pocharam 6,000,000
investment led to the IT industry's
IT SEZ
meteoric growth. The industry has
Mindspace Corpbeen one of the fastest growing sectors in India in the last decade, with
software services (IT) and ITeS as its key segments. Because of this robust expansion, India has established its
Arena
leadership as the SEZ IT service
global Topnotch
industry centre. Uppal 2,550,000 IT SEZ
Infratech Ltd

The government realised

Maytas Hill that IT Maytas
is a potential economic growth driver, 9,000,000
Bachupally and therefore established
IT SEZ Software
Technological Parks
County of India (STPI) in 1991 to focus on IT exports, development and training. The main
objectives of STPI are to build and manage infrastructure and provide other services like technology assessment
and professional training.

Hyderabad City is Still Very Affordable

Knowledge and Growth
– Rental Value Information
TrendIndustry in
Andhra Pradesh
Hyderabad is ranked second by the National Association of Software and Service Companies (NASSCOM) in
terms of city perception, which indicates the lower cost of living and good quality of life in the city as compared
The blue-chip
with revolution
the other emerged
major cities as an
in India. important
Property costeconomic driverisfor
in Hyderabad alsothelow
state
as of Andhra Pradesh
compared with theand thecities
metro
country.
in India, while rental values of commercial space in the city are lower than Bangalore and Chennai. Thetwo
The IT industry evolved in Andhra Pradesh in the late 1990s when the state government signed rental
agreements withspace
value of retail multinational softwarelower
is comparatively giant than
IBM that
for setting
of metroupcities
'Schoollikefor Enterprise-Wide
Mumbai and Delhi. Computing' and
Hence, Hyderabad
forging
is stillaaffordable
strategic partnership
in terms of about the use
real estate andofcost
IT. of living.

Commercial Rental Values6 by end-2007 Retail Rental Values7 by end-2007

across Major Cities in India across Major Cities in India

Hyderabad Chennai

Chennai Bangalore

Bangalore Hyderabad

Delhi Mumbai

Mumbai Delhi

0 50 100 150 200 250 300 350 400 0 50 100 150 200 250 300 350 400
Rental values in INR per sq ft per month Rental Values in INR per sq ft per month

Source: Jones Lang LaSalle Meghraj Research Source: Jones Lang LaSalle Meghraj Research

6
Commercial rental values of central and secondary business districts are considered.
7
Retail rental values of the prime central market is considered.
SWOT Analysis of Hyderabad as an IT
The government decided to develop the state into an IT and knowledge hub and hence, initiated the

Destination in India
development of Hitec City (Hyderabad Information Technology and Engineering Consultancy City) in the state
capital, Hyderabad. Hitec City, which primarily consists of IT parks and campuses spread across 158 acres, is
the first IT hub in the state to provide IT companies with built-up space and quality infrastructure. The
government then focused its attention towards aggressively marketing Hitec City to attract IT investment by
Strengths
developing Weakness
and strengthening policies, offering incentives and allocating land to developers and IT companies.

As a result, IT development and investment spread beyond Hitec City to Gacchibowli in Hyderabad and is
• Proactive state government • Currently the public transportation is weak
gradually spreading to the other cities within the state. Andhra Pradesh has put forth aggressive plans to
• Strong and stable political conditions
replicate the success of Hitec City to smaller cities. In addition, • Hyderabad
Less entertainment and recreation
has emerged options
as the prime IT hub
• New international airport
of the state and one of the leading IT hubs of India. Google's selection of Hyderabad as its campus city
• Favourable
reinstates IT policies and
its attractiveness as anincentives
IT destination and proactive government support.
• Ranks second in the country in terms of
Moreover
total the government
engineering is now
graduates looking
passing y-o-yforward to foray into sunrise sectors of Knowledge Process
Outsourcing (KPO) industry like Animation & Gaming - one of the fastest growing segments in the Asia Pacific
• Linguistic benefits, as communication is
region. In view of the above the state has proposed an Animation & Gaming City – known as “Digital
possible with
Entertainment City. ease
The in Hindi
city and English
is envisaged to be developed as the largest animation & gaming hub in South
apartThe
East Asia. from thewill
city regional languagethrough private-public partnership mode to be a world class facility with
be developed
incubation
• Goodcenters and will
educational and provide
researchaninstitutions
ideal environment for the Animation & Gaming Industry.
• Highest number of notified special economic zones
• Seismic zone I – lowest probability of earthquakes
Effect of IT Boom in Andhra
Opportunities Threats
Pradesh
on Real Estate
• Land prices are still affordable compared to • Unplanned real estate growth in the
those in Tier I cities
Existing and Emerging IT/ITeS Clusters• inoutskirts
• Growing migrant population that is leading to
of the city
AndhraPradesh
Increasing property completion in other
residential demand cities like
The IT boom has a significant effect on the real estate development of Pune
AndhraandPradesh.
Chennai Hyderabad is the
• Has
existing six operational
prime malls but
IT hub of Andhra can accommodate
Pradesh. • Rising
The overall development land priceswith
of Hyderabad shallregard
reducetothe
the foray of IT
about into
investment 20–30 the city has made the government realise andattractiveness
identify the ofIT the
sector
city as one of to
compared the most
important
• Localeconomic
developersdriver for the
are very state.
active upcoming cities

Therefore, the government started focusing on policies and infrastructure developments in other cities of the
state to attract IT investment, aiming at projecting Andhra Pradesh as a prime IT destination in India. The
fast-emerging cities that must be on the radar of developers, occupiers and investors after Hyderabad are
Visakhapatnam and Vijayawada. The other upcoming cities are Kakinada, Warangal, Tirupati and Cuddapah.

Landmark Projects in Hyderabad

Existing and Emerging
Developer: DLF
IT/ITeS Clusters in Location: Gachibowli, Hyderabad
Total land area: 26.54 acres
AndhraPradesh Total built-up area: 2,727,000sq ft
Type of Development : Commercial Development

WARANGAL Developer: Indu Group

Location: Shamshabad, Hyderabad
HYDERABAD
Total land area: 150 acres
VISAKHAPATNAM Total built-up area: 7,800,000 sq ft
VIJAYWADA Type of Development : Integrated township
KAKINADA development with commercial and residential
PRIME IT HUB
CUDDAPAH EMERGING IT HUB
TIRUPATI
Point Indu FUTURE IT HUB
 Hyderabad is known as the second ‘Silicon Valley' of India after Bangalore. It is the financial and economic capital
of the state of Andhra Pradesh and contributes the highest amount to the state's GDP, tax and excise revenues.
The service industry is the major industry in the city, employing 90% of the work force. Hyderabad is the second
largest city in India with an area of 625 sq kms.

The path to develop Hyderabad as an important IT hub started with the government's initiative to develop an IT
district with state-of the-art infrastructure called Hitec City. This development has earned the city’s IT district the
moniker, ‘Cyberabad’. Today, Hyderabad has several Fortune 500 companies such as Microsoft, Computer
Associates, GE, IBM, Motorola, Delloite Consulting, Oracle, Google, Dell, Franklin Templeton, Convergys, Bank of
America and Verizon to name a few. Microsoft has its largest product development centre in India—its biggest
facility outside its Redmond, US headquarters. The Hyderabad facility is spread across a 42-acre campus with
state-of-the-art facilities. Domestic IT giants such as Satyam, Wipro, Infosys, TCS, Cognizant Technology
Solutions, Polaris, Infotech and many more have their campuses in the city. In addition, the government promoted
the development of Fab City, which is envisaged to be a world-class hub for semiconductor and electronics
manufacturing. It is anticipated that the Fab City project will create 5,000 jobs by 2009 and up to 1.4 million jobs
by 2016 in 200 ancillary industries5.

Hyderabad has the advantage of having good infrastructure and the availability of skilled work pool, with about five
universities offering technical courses. The government is very proactive towards improving the physical
infrastructure in the city and has proposed several projects to support this goal. Among the projects aimed at
improving the city's connectivity are the development of the international airport and the Outer Ring Road
surrounding the city, phase-I of which is expected to be operational by the end of 2008. The city is also planning
to develop a metro rail transit system for efficient connectivity within the city. The city authorities are also working
towards the provision of adequate power and water supply.

http://www.fabcity.in/fab-city/about-fab-city.html
5
Current Stock of IT Parks
Compared to Non-IT Commercial
Buildings in Hyderabad
The current Grade A office stock in Hyderabad is about 11.7 million. The major commercial development in
the city is Hitec City and Gachibowli, which forms almost 83% of the current stock. This includes IT parks and
stand-alone projects. It is observed that most of the stock caters to IT occupiers.The pie chart below shows
that the development initially started with non-IT space catering to conventional businesses such as banking,
insurance, tourism etc. Since 2001, the IT sector witnessed a strong growth and large IT developments were
proposed in the market. As of 4Q ’07, IT space dominates the market with a share of 67% of the total current
stock.

Share of IT and non-IT Space in the Total Current Stock of IT Parks Compared to Non-IT
Stock as of 4Q07 Commercial Buildings in Hyderabad

10000

8000
Thousands sq ft

33%
6000

4000
67%
2000

0
1995 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

ITspace Non IT space IT space Non IT space

Map of Hyderabad Highlighting

the Major Existing and Emerging IT/ITeS Clusters

Jawahar
Nagar

Cyberabad Uppal

PRIME IT CLUSTER
Sh
am

EMERGING IT CLUSTER
sh
baa

FUTURE IT CLUSTER
d
 Upcoming Development of IT Parks/SEZs
by Clusters – Hitec City, Gachibowli and
Shamshabad
Projects Developer Location Total Built-Up SEZ/Non-
Area in sq ft SEZ
L&T Phoenix L&T Hitec City 2,500,000 IT SEZ
Info Park

Divyasree Divyasree Raidurg 4,000,000 IT SEZ

Tech Park

Ashoka IT Ashoka Builders Hitec City 1,800,300 IT Park

Park

Emmar Hills Emmar MGF Gachibowli 2,200,000 IT SEZ

Lanco Hills Lanco Group Manikonda 7,850,000 IT SEZ

Point Indu Indu Group Shamshabad 7,800,000 IT SEZ

The IT Revolution TSI Ventures

K Raheja
TSI

K Raheja
Nanakramguda

Hitec City
2,200,000

4,000,000
IT SEZ

IT SEZ
Mindspace Corp
The Indian IT revolution, also known as the blue-chip revolution, started in the early 1990s when the economy
entered into theK Raheja K Raheja and liberalisation.
phase of globalisation Pocharam
Factors such 6,000,000 IT SEZ
as the country's attractiveness in terms of
Mindspace Corp
skilled labour and support infrastructure and the easing of policies for foreign investment led to the IT industry's
meteoric growth. The
Arena SEZindustry has been one of the fastest
Topnotch Uppal growing sectors
2,550,000in India in the IT
last
SEZdecade, with
software services (IT) and ITeS as its key
Infratech Ltdsegments. Because of this robust expansion, India has established its
leadership as the global IT service industry centre.
Maytas Hill Maytas Bachupally 9,000,000 IT SEZ
County
The government realised that IT is a potential economic growth driver, and therefore established Software
Technological Parks of India (STPI) in 1991 to focus on IT exports, development and training. The main
objectives of STPI are to build and manage infrastructure and provide other services like technology assessment

Hyderabad City is Still Very Affordable

and professional training.

– Rental Value
Knowledge and Growth Trend
Information Industry in
Andhra Pradesh
Hyderabad is ranked second by the National Association of Software and Service Companies (NASSCOM) in
terms of city perception, which indicates the lower cost of living and good quality of life in the city as compared
with the other major cities in India. Property cost in Hyderabad is also low as compared with the metro cities
in blue-chip
The India, while rental values
revolution of commercial
emerged spaceeconomic
as an important in the citydriver
are lower than
for the Bangalore
state and
of Andhra Chennai.
Pradesh andThe
therental
value of retail space is comparatively lower than that of metro cities like Mumbai and Delhi.
country. The IT industry evolved in Andhra Pradesh in the late 1990s when the state government signed two Hence, Hyderabad
is still affordable
agreements in terms of real
with multinational estategiant
software and IBM
cost for
of living.
setting up 'School for Enterprise-Wide Computing' and
forging a strategic partnership about the use of IT.

Commercial Rental Values6 by end-2007 Retail Rental Values7 by end-2007

across Major Cities in India across Major Cities in India

Hyderabad Chennai

Chennai Bangalore

Bangalore Hyderabad

Delhi Mumbai

Mumbai Delhi

0 50 100 150 200 250 300 350 400 0 50 100 150 200 250 300 350 400
Rental values in INR per sq ft per month Rental Values in INR per sq ft per month

Source: Jones Lang LaSalle Meghraj Research Source: Jones Lang LaSalle Meghraj Research

6
Commercial rental values of central and secondary business districts are considered.
7
Retail rental values of the prime central market is considered.
The government decided to develop the state into an IT and knowledge hub and hence, initiated the
SWOT Analysis of Hyderabad as an IT
development of Hitec City (Hyderabad Information Technology and Engineering Consultancy City) in the state
capital, Hyderabad. Hitec City, which primarily consists of IT parks and campuses spread across 158 acres, is

Destination in India
the first IT hub in the state to provide IT companies with built-up space and quality infrastructure. The
government then focused its attention towards aggressively marketing Hitec City to attract IT investment by
developing and strengthening policies, offering incentives and allocating land to developers and IT companies.

AsStrengths
a result, IT development and investment spread beyondWeakness Hitec City to Gacchibowli in Hyderabad and is
gradually spreading to the other cities within the state. Andhra Pradesh has put forth aggressive plans to
• Proactive
replicate state government
the success of Hitec City to smaller cities. In addition,
• Hyderabad has
Currently the emerged
public as the prime
transportation IT hub
is weak
of •the Strong
state and one ofpolitical
and stable the leading IT hubs of India. Google's
conditions selection
• Less of Hyderabad
entertainment as its campus
and recreation optionscity
reinstates
• Newits attractiveness
international as an IT destination and proactive government support.
airport
• Favourable IT policies and incentives
Moreover the government is now looking forward to foray into sunrise sectors of Knowledge Process
• Ranks (KPO)
Outsourcing secondindustry
in the country in terms&ofGaming - one of the fastest growing segments in the Asia Pacific
like Animation
region.total engineering
In view of the graduates
above thepassing
state y-o-y
has proposed an Animation & Gaming City – known as “Digital
Entertainment
• LinguisticCity. The city
benefits, is envisaged tois be developed as the largest animation & gaming hub in South
as communication
East Asia. The city
possible withwill
easebeindeveloped through private-public partnership mode to be a world class facility with
Hindi and English
incubation centers and will provide an ideal environment for the Animation & Gaming Industry.
apart from the regional language
• Good educational and research institutions

Effect of IT Boom in Andhra Pradesh

• Highest number of notified special economic zones
• Seismic zone I – lowest probability of earthquakes

on Real Estate
Opportunities Threats
Existing andareEmerging
• Land prices still affordable IT/ITeS
compared toClusters• inUnplanned
AndhraPradesh
real estate growth in the
those in Tier I cities outskirts of the city
• Growing migrant population that is leading to
The IT boom has a significant effect on the real estate development
• Increasingof Andhra Pradesh.
property Hyderabad
completion in other is the
existing prime IT demand
residential hub of Andhra Pradesh. The overall development of Hyderabad
cities with
like Pune and regard to the foray of IT
Chennai
investment
• Has six into the city malls
operational has made theaccommodate
but can government realise and identify the IT sector as one of the most
• Rising land prices shall reduce the
important economic driver for the state.
about 20–30 attractiveness of the city compared to
• Local developers are very active upcomingdevelopments
Therefore, the government started focusing on policies and infrastructure cities in other cities of the
state to attract IT investment, aiming at projecting Andhra Pradesh as a prime IT destination in India. The
fast-emerging cities that must be on the radar of developers, occupiers and investors after Hyderabad are
Visakhapatnam and Vijayawada. The other upcoming cities are Kakinada, Warangal, Tirupati and Cuddapah.

Landmark Projects in Hyderabad

Existing and Emerging
IT/ITeS Clusters in Developer: DLF
AndhraPradesh Location: Gachibowli, Hyderabad
Total land area: 26.54 acres
Total built-up area: 2,727,000sq ft
Type of Development : Commercial Development

WARANGAL
HYDERABAD Developer: Indu Group
VISAKHAPATNAM Location: Shamshabad, Hyderabad
VIJAYWADA
Total land area: 150 acres
Total built-up area: 7,800,000 sq ft
KAKINADA PRIME IT HUB
Type of Development : Integrated township
CUDDAPAH development with commercial and residential
EMERGING IT HUB
TIRUPATI
FUTURE IT HUB
Point Indu
Retail Development Developer: TSI Ventures
Location:
Retail infrastructure in major cities in the state primarily Gachibowli,
consists Hyderabad
of high streets. The mall culture is new to the
state of Andhra Pradesh, similar to the rest of India. Total land area: 12
Hyderabad is acres
the only city that has witnessed mall
development to date. However, the up coming cities inTotal the built-up area:
state will 2,200,000
witness sq ft
mall development going forward.
Hyderabad has six operational malls by local developersType andofhouse
Development : Commercial
mass-market and high-end brands.

Hyderabad is also witnessing the development of malls by reputed national developers such as K Raheja, Prestige
Wave Rock
and IJM. Cities like Visakhapatnam and Vijayawada are also witnessing retail development on similar lines with
local players initiating the development of malls. Apart from this, most cities and towns in the state are
experiencing the development of stores of retail chains like Big Baazar, Reliance Fresh, Subhiksha, More
(previously known as Trinetra, which was bought over by Developer: Emmar
Aditya Birla MGF Spencer’s and Food World.
Group)
Location: Gachibowli, Hyderabad
Total land area: 25.82 acres
Total built-up area: 2,200,000 sq ft
Project Name Developer City/Location Anchors and Brands
Type of Development : Commercial and
Hyderabad GS Construction Integrated
Punja Gutta, Township development
Pantaloon Retail
Central Mall Hyderabad

Emmar Boulder Hills

City- Centre
SEZ Skill Promoters Banjara Hills, Globus, Max, Food
Hyderabad Bazaar, Mc Donald's
and E-zone
Developer: Maytas
GVK 1 Mall GVK Banjara Hills, Shoppers’ Stop and
Location:
Hyderabad Bachupally,InoxHyderabad
Total land area: 74.67 acres
Inorbit Mall K RahejaCorp Total built-up area:Shoppers’
Hitec City, 9,000,000Stop
sq ft
Hyderabad
Type of Development : Commercial and
The Forum Prestige
Integrated
Kukatpally,
Township development
Not decided
Crystal Mall Hyderabad

Maytas HillCounty – SEZ

Residential Development
Andhra Pradesh is witnessing residential development in full swing with international developers joining hands

Cities with potential

with local players across the major cities in the state. Hyderabad, being the prime city in the state has witnessed
quality residential developments by local developers as well as the government forming joint ventures with
international developers. A similar kind of development is proposed and is under different stages of development
for growth in IT
in cities like Visakhapatnam, Vijayawada and Tirupati. The following table shows some noted residential projects
in the state:

Andhra Pradesh envisages sustainable development

Project Name Developer City/Location Anchors and Brands
with focus on development of infrastructure and
talent pool. The state wasHill prepared
County to Master Plans
Maytas Bachupally, Villas and
and comprehensive development plans for emerging Hyderabad Apartments
cities and towns to promote overall development.
IJM Raintree IJM and APHB Kukatpally, Apartments
These initiatives helped the growth of Hyderabad in
major sectors like IT, Biotechnology,
Sanskruti Semiconductor
CESMA and APHB Pocharam, Apartments
Industry and AeronauticalTownship
hub. The major strengths of Hyderabad
the state are the availability of skilled work force and
Casa Koncept Kompally, Villas
good social and physical infrastructure.
Estebana Ambience Group Hyderabad

Apart from the capital city of Hyderabad,

Jurong we have
Jurong Group Rishikonda, Villas
Township
identified the following cities as emerging, which are Visakhapatnam
on our ‘watch list’. These cities have the potential to
Singapore Arihant Indo Mangalagiri, Apartments
emerge as tomorrow’s rising
Modelreal estate destinations.
African Infra Vijayawada
Township

Tourism Emmar and the Tirupati Villas and

Temple Andhra Pradesh Apartments
Township government
 Hospitality Sector
Similar to other sectors, the hospitality sector has its
major presence in Hyderabad. The city currently houses
hotel projects by luxury brands such as Taj Group, Accor,
WelcomGroup etc. All hotel categories from luxury to
budget are present in the city.

Similarly, Visakhapatnam, an important tourist destina-

tion, houses luxury brands such as the Taj Group. Hotels
in the budget sector are managed and operated by local Visakhapatnam
players. Vijayawada, a trading town, also has the
presence of four-star hotels by brands like Welcom Group
and the Taj Group. Local players are also active in the city.
The temple town of Tirupati, one of the most famous
pilgrim towns of India, also has good hotels which are
mostly in the budget category. Apart from the above-
mentioned hospitality infrastructure, most of the cities
and towns in Andhra Pradesh have AP tourism hotels and
lodges.
Visakhapatnam, called the ‘city of destiny’, is being considered as the next destination for investment after
Hyderabad. Madhurawada, which is located north-east of the city along NH-5, is witnessing major developments

Identification of
driven by the IT sector. IT companies have been allocated land in this area to develop and start their operations.
The city has a biotech SEZ and industrial developments like the steel and power plants in the south. The major

Development Paradigm
growth corridor is northwards, along NH-5 towards Vijayanagarm. The main challenge faced by the city is the
availability of skilled human resource.

Andhra Pradesh, being advantaged with strong government support

Population- 1,345,938
Literacy rate- 70.46%
Average Household size- 4.2
Languages- Telugu, Oriya,
English Hindi
Area- 1721 sq kms(VUDA)
Altitude- 5 mts above sea level
Climate- Sub Humid
Average Temperature -
Summer- 32oc -41oc
Winter - 12oc -22oc
Technical Universities - 2
Major Universities -
Andhra University and
Geetam University
YoY Engineering Graduates –
AU Region – 27575
Air connectivity -
Domestic Airport existing
Expansion of airport and night
landing facility in progress
Road Connectivity-
NH-5 passing through the city
APSRTC8 for interstate, intercity
and intracity connectivity
Rail Connectivity-
Good connectivity
and skilled work pool is already enjoying a leadership position as part
Water Connectivity-
of the Indian IT boom. The Keystate
Development
is well equipped with good
Seaport infrastructure
is one of the largest
and in
is working•further
Vizagtowards
is a service city and ison
capitalising well
its major
India called the “Brightest
strengths to makejewel”
it a worthy investment
developeddestination.
with large public sector
of Indian ports can draw ships up companies like NTPC, Vizag Steel Plant,
to depthThe development
of 15.3 mts of Hyderabad on the back of the IT boom has
Hindustan Refinery.
triggered
Good water thepower
supply and growth of other cities like Visakhapatnam and
• The new commercial development is
supply Vijayawada. The active participation of local governments in these
cities and the initiatives taken by at Siripuram
the area with thehas
state government HSBC building
prompted
Good Telecom and internet
collaborative
connectivity development of the cities
as only in terms
Grade A of infrastructure
building. The retail isand
talent pool. This
IT companies – Satyam, Wipro, cohesive development
mostly jointly
high managed
street retail. by different
government bodies has emerged • as are
6 malls theproposed
state’samong
Unique Selling
which 3
IBM Daksh, HSBC, Capgemini,
Proposition (USP) to attract investment across sectors, especially IT.
Kenexa and Infotech are under construction. 3 five star hotels
Recreation: The city has beach, under construction.
pubs and restaurants for • Good quality residential development
recreation. is seen along beach road mostly by local
Hospitality: The city has 3 five
developer. Jurong (Singapore based
star hotels with total of 225
developer) is developing villas at
rooms
Rishikonda.
Medical facilities: 10 private
hospitals and 3 government • Jurong is also coming up with other
hospitals which include Apollo residential projects with Visakhapatnam
Hospital, Care, Seven Hills, Urban Development Authority.
Queen’s NRI Hospitals • International Airport coming up at
Educational facilities: Schools- Rayavaram 60 kms from the city.
458; Degree College-44; Medical • New Seaport at Gangavaram is under
Colleges - 2
construction can draw ships up to a
depth of 21 mts.
• 3 notified IT SEZ – Two by APIIC and
one by Satyam Technologies.
• Unitech has taken up 1,700 acres to
develop a knowledge city adjacent NH-5.

Andhra Pradesh State Transport Corporation

8

Social Infrastructure
Vijayawada is traditionally a trading town and lies in the prime agricultural bed of Andhra Pradesh. With its main
economic base being agriculture, the city has immense potential for development of food and agro industries. The
government has allocated land at Mangalagiri for the development of an IT SEZ, and another IT park is planned at
Gannavaram. The city is growing along NH-5 with the major growth being along the south corridor of NH-5
towards Guntur. The two growing areas•within
faced by the city is availability of land as mostinofthe
Population- 1,039,518
Literacy rate- 71%
Average Household size- 4.4
Languages- Telugu, English
Area- 1665 sq kms(VGTMUDA)
Altitude- 11.88 mts above sea
level
Climate-tropical
Average Temperature -
Summer- 30oc - 41oc
Winter – 10oc -17oc
Technical Universities - 1
Major Universities -
Nagarjuna University
YoY Engineering Graduates –
AU Region – 27575
Air connectivity -
Domestic Airport existing at
Gannavaran, 16 Kms from city
Road Connectivity-
NH-5, NH-9 and NH 215 are
passing through the city
APSRTC for interstate , intercity
and intracity connectivity
• Andhra Pradesh is called a ‘river’s state’, with major rivers such as
Godavari, Krishna and Pennar providing ample water supply across
the state.
• Nagarjuna Sagar Dam is a masonry dam built across Krishna River
in Nagarjuna Sagar. It is the world's tallest masonry dam at a height
of 124 m and creates a reservoir holding up to 11.472 billion cu m.
• The major projects of the government are Krishna and Rural water
supply projects
• Andhra Pradesh has a good communication network, with 3,341
• Vijayawada
telephone exchanges and 326.4 million of telephone connections.
Optical fibre cable networks by corporate leaders like BSNL (44,500
km), Reliance (6,000 kms), Bharat (3,450 kms) and Tata (1,700 km)
are being planned and will bring a wide range of communication
network to the state.
• The state is in the top quartile of Internet subscribers with 219,000
in 2003.
• The state has a bandwidth of 365 Mbps out of Hyderabad and 100
Mbps out of other cities.
• Postal infrastructure includes 16,213 offices.
Thethe state city
is are
wellGannavaram
equipped with andsuper
Mangalagiri.
specialtyThe
andmajor challenge
specialty hospitals
it iscities
prime of agricultural
Hyderabad,land and privatelyVijayawada
Visakhapatnam, owned. etc.
• The rural health care of the state is good compared to that of other
states but it still needs considerable improvement.
Rail Connectivity- Key Development
Good connectivity ; largest • The city is currently witnessing few
junction of South Central railway developments along the Bander Road
• The state has 20 leading institutes such as Indian School of Business
Water Connectivity- which is the prime commercial and retail
(ISB),
Nearest seaport is Indian Institute of Chemical Technology (IICT), International
Machilipatnam
Institute destination
of Information Technology of the town.
(IIIT),Centre for Cellular and
port at distance of 65 kms
Molecular Biology (CCMB) • etc.
The city currently has Grade B commer-
IT companies – SMEs like UX
• The state has 1,330 arts, science and commerce
cial development colleges,
by local 238
developers.
Group, GSR Technologies,
engineering colleges and• 53 medical colleges.
Two IT SEZs are proposed in the city, one
Efftronics and Essel Software
Recreation: The city has a river at Gannavaram close to the Airport and
side, movies theatres and other at Mangalagiri by APIIC.
restaurants for recreation • L&T is developing the IT tower at
• The
Hospitality: state
The city hascurrently
3 four has quality recreational areas in cities like
Gannavaram and is expected to
Hyderabad and Visakhapatnam.
star hotels with a total of 279 complete by the year end.
• Hyderabad and Visakhapatnam have multiplexes, malls and pubs.
rooms
• The smaller cities in the stateThe
• citycinema
have retail is mostly
theatrehigh
andstreet
local
Medical facilities: 4 private
restaurants for recreation. development along the Bander Road ,
hospitals and 1 government
Elluru Road and NH-5.
hospitals which include Apollo
• 3 malls are proposed to be built in next
Hospital and Manipal Hospital
Educational facilities: Schools- 2 years.
133; Medical
• ItColleges • Most
– 1 state with natural
is a tourism of thebeauty
scenic residential
anddevelopments
pilgrim centres
within
that are rich in culture and history. the city are low rise plotted
• Major tourism destinations are Tirupati, Hyderabad
development. and by local
Few apartments
Visakhapatnam. developers are also there.
• Hyderabad is a blend of old and new cultures, with its 400 year
• The urban development authority has
history with historic monuments such as Charminar, Golkonda Fort
and Hussain Sagar. The latestproposed a township
attraction is Ramoji development
Film City.
• named ‘Singapore
Visakhapatnam is embedded amidst the sea coast and Model Township’
the hills,
making it a good destination for scenic beauty.
within the Amaravati Township at
• Tirupati is one of India’s prime pilgrim centres
Mangalagiri and MS
in a JV with is the abode
Arihant Indoof Sri
Balaji (the reincarnation of Lord Vishnu). It is visited annually by 19
African Infra Developers & Builders Pvt Ltd.
million devotees, who donate about INR 2 billion each year.
• Andhra Pradesh's tourism facilitates tourism facilities with hotels,
lodges and the information needed to plan vacations.
 Talent Pool and
Educational Institutions
Andhra Pradesh has the advantage of a strong work pool which is one of the key drivers of the IT industry. Every
year, the state produces about 350,000 university graduates, 95,000 engineering graduates and 10,078
management graduates. The state contributes to about 23% of the country’s IT professionals. In order to improve
employability of engineering and other graduates and to make them industry ready, Jawahar Knowledge Centres
(JKC) is the flagship programme of the state government.
Tirupati
The key initiatives to improve the quality of education for IT profession are the following:

• International Institute of Information Technology (IIIT) was established by IBM, Motorola, Signal Tree,
Oracle and Satyam in Gachibowli, Hyderabad to train and educate engineers, undergraduates and
post-graduates. It works closely with the mentioned industry leaders to undertake courses to support the
sector.

• Indian School of Business (ISB), in partnership with Wharton School, Kellogg School of Management and
London School of Business is strengthening the work pool in Hyderabad to cater to the global companies.
The other emerging city is Tirupati which is growing along the east towards Renigunta. The city has a low
availability
• Masterof ofland as most
Science in ITofProgramme
the land is (Mellon
for private ownership.
University aimsThe city has atalent
to develop goodtogrowth potential
support as it is close
the requirements
to Chennai and Bangalore.
of IT development.

• Hyderabad is expected to house the second IIT campus of South India after Chennai. Birla Institute of
Population- 303,521Sciences (BITS) from
Technological Chennai and
has planned 240 kms
to build from
its campus on Key Development
a 200-acre land parcel in Jawaharnagar,
Literacy rate- 75%
Shamirpet in the north-easternBangalore
suburbs of the city. • The main economic activity is driven by
Average Household size- 4.4 APSRTC for interstate, intercity the pilgrimage activity. With the availability
•Languages-
AnotherTelugu,significant
Tamil,initiative
English ofand Government of Andhra Pradesh is the Rajiv Gandhi University of Knowledge
intracity connectivity
of human resource and infrastructure, the
Area-Technologies
847.75 sq kms(TUDA)to cater primarilyRail to the educational needs of the meritorious rural youth. The prime objective
Connectivity-
city is looking forward to IT sector for
is to 162
Altitude- impartmtsintegrated educational
above sea level Goodprogrammes
connectivity with broad professional education and soft skills to meet
the industry demands for the rural youth. The course shall commence further
in the economic
academicdevelopment.
year 2008-2009.
Climate-tropical Water Connectivity-
Average Temperature - Good water and power supply • One notified IT SEZ by APIIC is proposed at
Summer - 41 c -45 c
o o
Good telecom and internet Renikunta for IT development.

SEZ Development
Winter – 10oc -18oc
Technical Universities - 1
connectivity
Recreation: The city has movies,
• The retail development is mostly traditional
grocery and general stores along the major
Major Universities - theatres and restaurants for roads. It therefore, has potential for
Andhra Pradesh has
Sri Venkateshwara 40 SEZs approved
University by the central government for theorganised
recreation. IT sectorretail
as ondue31st December
to the high inflow2007,
of
which is highestGraduates
YoY Engineering in the country.
– It Hospitality:
is expected Thetocity
create
has 3direct
star employment of about
pilgrims from800,000 people
all over the world.in next five
years. The total
SVU Region land of 2356 acresand
– 13550 is allotted for these SEZ developments and it is expected to provide a total built
4 star hotels
• It has one mall proposed within the
up
Air space of 97.25
connectivity - million sq ft. TheMedical
SEZs are expected
facilities: to provide international standard IT environment. The state
2 Hospitals;
is expected
Domestic to get
Airport a total
existing at of 71 SEZsRuhiyaamong which 49 SEZs have alreadyTourism
and SVIMS
Temple Township
been notified Projecttoincreate
and expected
overall jobs for 2.5 million people. PPP9 model.
Renigunta 14 Kms from city Educational facilities: Schools-
Road Connectivity- 23;Degree College- 3; Medical • The residential development is mostly low
Tirupati is at a distance of 137 kms Colleges – 1 rise plotted development.
• Emmar MGF is developing an integrated
township in a 140 acre land parcel which
will develop Luxury Villas and Apartments,
Retail and Hospitality.
• In addition to this the Tourism Township
Project in PPP model also plans to develop
Villas and Apartments along with supporting
infrastructure.
• Two four star hotel developments are
proposed.

9
Private Public Partnership
 The future
cities -
Warangal,
Cuddapah
and Kakinada
Warangal has the advantage of being close to Hyderabad and has a good work pool due to the presence in the
National Instituteofofthe
In the scenario Technology (NIT). Thegrowth
strong economic city is growing along NH-202.
of the country, The of
the state proposed
Andhra IT SEZ is in
Pradesh hasthebeen
westvery
at Hanamkonda.
proactive Cuddapah
to attract lies along
investment NH-18, and
in various the government
sectors like IT/ITES,is pharmaceuticals/biotechnology
taking many initiatives to developtothe area a
provide
for
business-friendly environment. The state offers policy support to facilitate the investment. It also hasa the
IT/ITeS. Kakinada has the advantage of being close to Visakhapatnam. The city has a seaport and has
planned
advantagefoodofprocessing SEZ. The
a good talent poolcity is growing
and along NH-214.
infrastructure in terms of connectivity, power, water supply and
communication. Andhra Pradesh is one of the leading regions in the country to implement e-governance across
multiple disciplines. The concept of ‘e-seva’ was first introduced in the state. It is a one-stop destination where
commoners can pay their utility bills and complete other municipal activities. The social infrastructure in the

Warangal
state's cities and towns is also good. The key factors attracting investment in the state are the following:

Policy Support
Population- 579,216
Literacy rate- 58.41%
Average Household size- 4.7
The Government
Languages- Telugu, of Andhra
Hindi,
English
government
Area- has (KUDA)
1805 sq kms formulated a new
preferred destination of the IT Companies
Altitude- 302 mts above sea level
The state gives declaration as SEZ3 status to the company or developer
Climate-Warm Dry
non-agricultural land of more than 10 hectares or 25 acres and adhere to the
Average Temperature -
of India. Sinceo the SME 4
Summer
exclusive– 23.2
space c –for
39.6 o
c
these
Winter – 13.5oc – 30oc
Technical Universities - 2
Major Universities -
National Institute of Technology
Kakatiya University
YoY Engineering Graduates –
OU Region – 53,365
Air connectivity -
Domestic Airport at Mamoor
Nearest International airport at
Hyderabad, 130 kms away
Road Connectivity-
NH 202 passing through the city
Key Development
• Warangal is within a distance of 130 Kms
APSRTC for interstate , intercity from Hyderabad – the prime IT Hub. This is
Pradesh
has given
and intracity a strong policy support to attract investments in the state. The
connectivity the major advantage for the city. It has
ICT Policy 2005-2010 to make Andhra Pradesh the most attractive and
Rail Connectivity-
potential
in the world. The state also provides thetoITwitness a satellite
companies withtown growth
incentives.
Good connectivity ; major railway
who due
of Hyderabad ownto free hold,
the spill overtitle
of IT free,
station at Kazipet
Rules of SEZ
developments ofAct
the 2005
city. of Government
Good water and power supply
companies have difficulty in acquiring 25 •acresThe ofcity
land,
has the government
general unorganised will provide
retail
SMEs inGood
the telecom
APIIC SEZandatinternet
Kokapet, Hyderabad.
connectivity growth and low rise residential
Recreation: The city has movies, developments.
theatres and restaurants for • One notified IT SEZ by APIIC is proposed at
recreation. Hanamkonda.
Hospitality: Only Government
Tourism Hotels
Medical facilities: 3 Hospitals;
Kakatiya Medical College, St.
Ann’s Hospital
Educational facilities: Schools-
300 ; 35 Degree College- 3;
Medical Colleges – 1

3
Special Economic Zones
4
Small and Medium Enterprises
Urban and Rural Infrastructure
Andhra Pradesh has a well-established internal, national and international connectivity.
The state has realised the importance of infrastructure in the overall development and hence
is working towards improving and strengthening urban and rural infrastructure even further.

Connectivity Cuddapah
• Total road network of 178,474 km with about 12 national
highways of 4,014 km and state highways of 8,763 km.
• The major national highways passing through the city
are NH-5, NH-7, NH-9, NH-16 and NH-18.
• Andhra Pradesh State Road Transport Corporation
(APSRTC) provides road transit facility for inter-state,
inter-city and intra-city connectivity.
• APSRTC is considered as the largest state-transport
undertaking in the world.

Population- 262,506 Road Connectivity- Key Development

Literacy rate- 70% • passing
NH 18 The state is the
through thehome
city of the
• headquarters
Cuddapah districtof South Central
has vast Railway
potential in
Average Household size- 4.9 in Secunderabad, Hyderabad.
APSRTC for interstate , intercity mining barites, limestone, dolomite, clay,
Languages- Telugu,English
• The state has four zones among the total of 16 zones of Indian
and intracity connectivityity
Railways which are South Central granite, slabs etc
Railway, Eastas Coast
per theRailway
report - IGNITE-
South
Area- 15,359 sq kms (District) Rail Connectivity-
Western Railways , Southern Railways.the CII study on the industrial potential of
Altitude- 138 mts above sea level Good connectivity
three districts of Andhra Pradesh.
Climate-Tropical Good water and power supply
• The other areas of development are
Average Temperature - Good telecom and internet
Summer- 30.0oc – 44.0oc connectivity horticulture and sericulture.
Winter – 21oc -30oc • The state has six
Recreation: The city has moviesdomestic • airports and one
The report also international airport
indicates potential in
of the
Technical Universities -1
Hyderabad (operational
theatres and local restaurants for
in March 2008).
district in ITeS sector. The government is
Major Universities - recreation. keen to explore this potential and is
Yogi Vemmana University Hospitality: Only local hotels working towards eliminating the existing
YoY Engineering Graduates – mostly 2 star category and lodges challenges of connectivity and other
SVU Region – 13,550 Medical facilities: 2 Hospitals; infrastructure requirements.
Air connectivity - Cuddapah
• The General
statehospital
has four seaports—Visakhapatnam (the country’s second
Nearest airport is Tirupati Airport at Educational facilities:(Entire
largest), Kakinada, Machilipatnam and Krishnapatnam.
Renikunta • Gangavaram
District)Schools- 3789 ;deepwater
Degree port is under development in Visakhapatnam.
It has
College- 17; a cargo-handling
Medical Colleges – 2 capacity of 44.6 million tonnes.It is expected
to be operational this year.

Power, Water and Telecom

• Andhra Pradesh's power sector has consecutively ranked first in
2004–2005 and 2005–2006 as per the CRISIL ratings.
• Andhra Pradesh is the third-largest power utility in the country with
installed capacity of 11,134 MW.
• The state has the highest hydel installed capacity in India, reduces
the cost of power.
• The state's power supply network, which consists of 25,719 circuit
km (ckm) of EHT lines, 207,432 ckm of HT lines, 437,610 ckm of
transmission lines and 2,645 sub-stations, is one of the largest
networks in the country that supplies power to nearly 16,925,194
consumers.
• It is programmed to add 4X400 KV, 5X220 KV and 20X132 KV
sub-stations and 809 ckm of 220 KV lines and 395 ckm of 132 KV
lines. Another 279 33/11 KV sub-stations are being added.
 The Evolution of the
Indian Economy
The Indian economy, initially evolved as an agricultural
economy and is now being driven by the services and
manufacturing industries. It experienced robust
expansion, with a GDP growth of 9.4% and a per capita
income growth of 8.4% in 2006–2007. The service
industry contributed 61.8% to the GDP in 2006–2007 and
hence is the primary economic driver of the country. The
service industry, or the 'tertiary sector', covers a wide
gamut of activities like trading, banking and finance,
infotainment, real estate, transportation, security,
management and technical consultancy, among many
others. However, the information technology (IT) and
IT-enabled services (ITeS) industry cater to all these
sectors, and hence it is the leading sector in the service
industry that drives the Indian economy.
Revenue Growth of IT/ITeS Industry in India

Contribution of the 60

IT/ITeS Sector to the

Our research has identified new economies and geographies that have displayed sufficient growth to be placed
on the radar of domestic and international occupiers, investors and50 developers. These cities will become the

Indian Economy
benchmark for hyper real estate development over the next decade. With rising population, increasing income
levels, improving infrastructure and government funding, these Tier40 III cities have strong long-term economic
Revenue in USD billion

prospects and will offer multiple property market opportunities. 30

The Indian IT story goes back to the 1950s, when IBM
This the
had hyper growth
virtual will beofaccompanied
monopoly by some challenges.
computer development and We have 20 identified the following challenges that
could become ‘road blocks’ in the face of development.
distribution in the country. But the IT revolution and major
10
developments were only triggered in the 1990s with the

Infrastructure
liberalisation of policies. The continuous and fast growth
of the IT sector over the past decade can be attributed to
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

the efforts of the Indian government to constantly Domestic Market Exports Total Revenue
The lack of
stimulate thequality
growthinfrastructure
of the sector in byIndia is not
offering only affecting economic growth, but also
incentives exerting monetary
Source: NASSCOM – IT Fact Sheet, August 2007
pressure.
and For instance,
tax benefits inefficient
to occupiers, ports andand
developers burdened airports are adding to the operating costs of corporate India.
investors.
WithIT/ITeS
The rising urbanisation
industry is and more people
an important partaspiring
of thetoIndian
settle in major cities, there is a rising pressure on the existing
supportindustry
service infrastructure. There hasabout
and contributes been 5.4%
an exponential
of the GDP. growth in the number of cars and airplanes in the country,
IT Industry Contribution to the Indian Economy
but without
With a corresponding
the IT exports growthUSD
figure touching in airports and roads.
31.9 billion and
the domestic market growing to USD 15.9 billion in 2007, 6.0% 1.8
The IT/ITeS
the Indian government recognises the
sector is undoubtedly theneed for the growth of infrastructure
fastest-growing 5.0%
and has earmarked large investment 1.6

over the innext

industry four
India. It to five years.
aspires MajorUSD
to achieve investment
60 billionis inexpected 4.0%
to be deployed in some key sectors such 1.4
1.2
as
highways, civil aviation, seaports and railways both by the government and the private sector. The state of
Millions

exports by 2010 . As shown in the adjacent graphs, the IT

1
3.0%
1
Andhra Pradesh
industry growth is has initiated
being infrastructure
fuelled by expansion developments
in domestic such as 2.0%the development of a new international airport, 0.8
0.6
a mass
and rapid transport
international markets. system, flyovers in Hyderabad; upgradation of existing airport, proposed second 0.4
1.0%
international airport in the state and a new seaport in Visakhapatnam; expansion of the airport in Vijayawada; 0.2
0.0% 0
improvements of state highways to improve connectivity with larger cities such as Bangalore and Chennai.
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

% in GDP Direct Employment

Source: NASSCOM – IT Fact Sheet, August 2007

Strategic Review 2006, NASSCOM

1
 Rising Competition
Overview and Contribution of the
State of Andhra Pradesh to the
The Indian real estate market is not only growing in terms of pace, but also in scale. Real estate growth engines

Growth of the IT/ITeS Sector

are no longer in cities like Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Kolkata and Pune. The smaller cities
are now expected to be the growth drivers over the next decade.
More than a dozen Tier III cities shall compete with each other to attract developers, investors and occupiers.
We foresee
Andhra government
Pradesh was rated support
as 'thetohigh-tech
be one of the prime
capital of differentiating factors that will catapult certain cites
over others. The small cities in the state
the sub-continent' according to the National Geographic of Andhra Pradesh will have an advantage due to relentless
government
in its article support.
entitled ‘Emerging Global Cities of the
World’. The state earned the fourth highest revenues in
The
IT state government
exports of about INR has1.85
a vision for(USD
billion select4.5
cities, and it is evident from the fact that critical departments such
billion),
as the Urbanfor
accounting Development
about 15%Authority
of the and totalMunicipal
IT/softwareCorporation are working in tandem towards the progressive
development
exports of theof their city. Most cities have a well-defined master plan, and active development efforts are under
country.
way led by public and/or private enterprises.
Software exports contribute to more than half or about
53% of the state’s total exports, while the service

Human Resources
sector already accounts for 43% of the GSDP2 and
employs 20% of the total work force in the state.
Andhra Pradesh has invested a total of INR 190 million
towards the development of infrastructure to support
Availability of skilled labour will be a challenge going forward as more and more corporates try to attract the labour
the service industry, with 185 domestic firms and MNCs
pool. It is becoming increasingly difficult to find and retain talent with relevant experience. Although India has the
already operating in the state.
highest percentage of youth population, a small percentage of them are educated to manage mid-level to
senior-level operations. Further, the percentage of those with relevant field experience to take on the scale and
The IT revolution in the state of Andhra Pradesh started
pace of growth is very low. To tackle this situation, many corporates are looking at surrogates or closely matched
in the late 1990s when the state government signed an
industries to attract talent. Corporate India is also tying up with leading institutions to set up specialised courses
Memorandum of Understanding with Microsoft. This
aimed at exposing current and potential employees to practical methods and operations. Andhra Pradesh is better
triggered a cluster effect, drawing many other software
placed due to the presence of large number of graduate and post-graduate colleges and institutions mentioned
MNCs to follow suit. During the same period, because
earlier in this report.
of the incentives offered by the government, the state
also witnessed the mushrooming of a host of software
Andhra Pradesh has huge development potential with Hyderabad as an important IT hub followed by
entrepreneurs that started operations.
Visakhapatnam and emerging cities like Vijayawada and Tirupati. The future cities like Warangal, Kakinada
and Cuddapah are also set for development. The state’s initiatives and strategies for infrastructural
The success of Andhra Pradesh can be attributed to the
development, human resource development and policy framework to support and attract investments are
proactive initiatives of its government and the state's
expected to place it firmly on the global business map in the coming years.
potential to sustain long-term IT growth. The first
initiative promoted by the government was the
development of Hitec City in Hyderabad, which has
been transformed to become the prime IT hub not only
of the city and the state but the whole country today.

Growth of IT Exports in Andhra Pradesh

200

180

160

140

120
INR in billions

100

80

60

40

20

97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07

Exports

2
Gross state domestic product
For more information please contact:
Shailendra Kumar Joshi, IAS
Secretary-Information Technology
& Communications Department
'D' Block, 3rd Floor,
AP Secretariat, Hyderabad
Andhra Pradesh
tel + 91 40 2345 6401/2345 6409
fax + 91 40 2345 0103
email prlsecy_itc@ap.gov.in
www.apit.gov.in
Author:
Abhishek Kiran Gupta
Assistant Vice President-Research
Jones Lang LaSalle Meghraj
Trivita Roy
Senior Analyst-Research
Jones Lang LaSalle Meghraj-India
www.jllm.co.in