From Port City to investment hotspot: Visakhapatnam’s real estate sector enters a high-growth phase

Dharmender Varada, a seasoned entrepreneur and Chartered Accountant, has over three decades of experience in the realty sector, hospitality, retail, IT, taxation and audit. He is a dynamic person with an innovative approach.

After securing all India 31st rank in chartered accountancy in 1992, he had a stint in the IT sector in the United States for sometime. Later he tried his luck in the quick service restaurant industry, successfully establishing Dunkin Donuts franchisees. Upon his return to the motherland, he played a key role in opening Kalanikethan in Visakhapatnam as a contemporary retail powerhouse.

After coming out with flying colours in entrepreneurship, Dharmender transitioned into real estate development by setting up Novus Infra Pvt Ltd and Novus Constructions in 2008. Under his visionary leadership, Novus Constructions took up landmark projects such as Novus Florence Village and Novus Dutch Country, setting new benchmarks in premium living spaces in Visakhapatnam with meticulous planning and cutting-edge design.

Further expanding his vision, Dharmender Varada, who is currently Credai Vizag president, focused on high-end projects. He is instrumental in the emergence of Godha Developers, which is determined to redefine luxury housing with its flagship project. He has plans to popularise premium lifestyle spaces creating unparalleled experience in luxury and convenience ventures that redefine industry standards.

In an exclusive interview to Bizz Buzz on the eve of 3-day 11th Property Expo by Credai, he said the goodwill generated after successful holding of CII Partnership Summit in Visakhapatnam and the series of proactive measures initiated by the Andhra Pradesh Government have already started showing positive response.

He is confident that the development of Visakhapatnam Economic Region and the announcement of mega investments by Google and other big ticket projects will further demand for housing in all segments in the near future

How is the realty sector in Visakhapatnam region shaping up mainly after signing MoUs envisaging an investment of Rs.13.25 lakh crore at the 30th edition of CII Partnership Summit in Visakhapatnam in November?

The realty estate sector in Visakhapatnam is really picking up, as the city is turning into a happening investment destination. We see a lot of positive leads, and sales happening. Some areas close to the locations where the projects are announced are witnessing a steep rise in land and apartment prices.

This has started motivating the stakeholders involved in the sector, who have been suffering a lot for a long time since the Covid-19 pandemic hit them very badly. Most of the investments announced are concentrated in and around Visakhapatnam, which we consider as a very positive and highly encouraging growth indicator.

How is the Google's announcement to invest a whopping $15 billion in a mega AI-centric data centre and the launching of operations by Cognizant and TCS and the decision to form Visakhapatnam Economic Region comprising nine North Andhra districts to achieve a $135 billion economy by 2031 will propel real estate growth?

City of Destiny as Visakhapatnam or Vizag is popularly known, has a great potential to grow economically. Though it stands as the 10th richest city in terms of GDP with a robust industrial ecosystem, a major contributor so far has been the public sector undertakings.

But the city’s potential in terms of available manpower, comfortable living standards, affordable cost of living, and picturesque terrains still remain largely untapped by the private sector. The State Government's initiatives in hosting the high-profile CII Partnership Summit in Visakhapatnam and reaching out to large global corporates at World Economic Forum in Davos and through roadshows held by deputing government and business delegations across the globe have started convincing them about the city’s inherent potential to the world that resulted in some of the corporates starting their operations in the city.

However, there are a plethora of opportunities for more IT, tourism, industrial, infrastructural corporations to set up their businesses. We expect many more employment opportunities created by these organisations by giving a big boost to the real estate sector. Each investment is going to have a chain effect on the service, hospitality and other sectors boosting the economy of the region.

Recently RERA Chairman A Siva Reddy called for denial of permissions by urban civil and planning bodies to builders not registered with RERA. What is your view?

We welcome the decision of the RERA Chairman. RERA and Credai have organized several awareness sessions explaining the members about the statutory requirements to register the projects.

Our members are complying with the requirements and guidelines issued from time to time to adhere to the highest ethical standards in the industry. If there is still non-compliance, strict measures are very much needed and we welcome such bold initiatives in the largest interest of the real estate sector.

How do you find a solution to issues raised by Credai over the TDR (Transfer of Development Rights) bonds issue?

TDR bonds once issued and are uploaded on to the State Government portals. They will have legal sanctity once they are put into the portals. Public and developers rely on the reliability of these bonds once they are issued.

Any errors or frauds committed in obtaining those bonds shall be taken up against the individuals who obtained them by dubious or nefarious means. Public who purchased those and utilised them should not be penalised.

A TDR bond issued under the State Government statute should be given its due legal reliability. Public at large should not be penalised for the unethical practices of a few, any view taken to the contrary hurts the confidence in the system.

There seems to be teething problems with regards to implementing single window clearances. There are also complaints on glitches faced in accessing the portal. Your comments please...

We must appreciate the sincere effort of the State Government to implement much needed single window clearances for building approvals. Hitherto, we had to get approvals from more than seven different departments which usually consume a lot of time and effort.

It is a fact that the technical glitches have still not been solved, but looking at the speed the Municipal Administration and Urban Development Minister P Narayana and the Principal Secretary S Suresh Kumar are ensuring that hurdles are cleared for good. We are hopeful that the day is not too far away.

To what extent the reduction in GST on cement from 25 to 18% is helping the builders?

On the overall cost of construction, GST reduction on cement and other construction materials will contribute to a 3 to 5% reduction in the cost of construction. This will benefit all.

Is the problem of getting input subsidy solved?

There is no GST input subsidy as of now. We are reaching out to Union Finance Minister Nirmala Sitharaman requesting for giving the developers an option to choose composite rate of 5% or with input subsidy. We are hopeful that our request would be understood in the interest of the sector and public at large.

With focus on increasing connectivity by developing Bhogapuram International Airport and issuing tenders for metro rail, do you think the realty sector will see a boom-time in the Visakhapatnam region?

Undoubtedly, we are witnessing the boom time already. Our submission would be to take up development of all master plan roads within a certain radius of the present city so that it can expand much faster on all sides, rather than pick and choose 7 or 8 roads out of 200+ roads with potential development. City’s growth was hampered for a very long time.

So it is time to take some quick and comprehensive measures. Needed funds should be augmented through innovative means. The State Government should also look at raising funds by issuing bonds specifically for the city’s infrastructure development, mainly roads, facilitating use of those bonds for payment of building plan approvals.

Which sector is having more demand? Is it affordable housing, condos & gated communities or commercial spaces?

There is great demand for gated communities, affordable housing and commercial spaces…we are also receiving a lot of enquiries for IT office spaces.

Hence, the city's manifold growth has led to increase in demand for gated communities, affordable housing, commercial complexes, co-working space and all other segments for the boom time in construction which we are witnessing after a long time.