Guide for Eluru Commercial Real Estate Investment

8 min read • Published 22 October 2022
Written by Anshul Gupta
Eluru Commercial Real Estate Investment

The city of Eluru in Andhra Pradesh is well known for its hand-woven products and carpets. These eco-friendly carpets are exported to countries like Australia, United Kingdom, Germany and the United States. In terms of connectivity, the National Highway 16, Golden Quadrilateral and Asian Highway 45 pass through the city. 

In addition, the Eluru railway station is classified as an A-category station. There are other stations in Powerpet, Denduluru and Vatluru. With its industries and easy connectivity to different parts of the country, Eluru can truly be a real estate investment haven. 

Let us now understand how investing in commercial real estate in Eluru might be a profitable venture.

Top Reasons to Invest in Eluru Real Estate

Here are some of the reasons why you should consider investing in commercial real estate in Eluru:

  • Connectivity

Eluru has good road connectivity as it is located near the Vishakhapatnam to Vijayawada highway. The nearest airport is Hyderabad International Airport which is around 335 km from Eluru. This airport connects Eluru to all the major cities in the country as well as abroad. The city also has its own railway station that ensures easy connectivity to all the major parts of the state.

  • Thriving Industries

The incense industry of Elluru is thriving. Even the jute industry is doing exceptionally well in this city. This city is also known for wool carpet industry. The state government has allocated 0.547 square miles of land near Eluru for light combat aircraft manufacturing facility. All these different types of industries make Eluru an attractive commercial space for investment. 

Commercial Real Estate Investment Opportunity in Eluru

Here is a list of some localities in Eluru which are suitable for commercial real estate investment:

  • Ramachandra Rao Pet

It is a nice locality and has great connectivity as the bus stop and railway stations are located in the vicinity. Social amenities like malls and supermarkets are situated at a distance of 500 meters. Rate of property in the locality ranges around ₹3,113 to ₹6,041 per square foot.

  • Powerpet

It is one of the most popular commercial areas in Eluru. This area is famous for its furniture stores, electronic stores, gyms, beauty parlours, textiles, and clothing. In terms of connectivity, the main arterial roads pass through Powerpet. Rate of property here ranges around ₹4,983 per square foot.

Things to Consider Before Buying a Commercial Property in Eluru

Here are some factors that you might want to consider before opting for a commercial property in Eluru:

  • Assess Locality

Location is a significant factor that should be assessed before purchasing the property. The location has to be accessible from other major parts of the city as well as the state. Opting for a property in a premium location will help you earn guaranteed high returns on investment.

  • RERA Authentication

It is wise to go through the RERA Andhra Pradesh website to check the authenticity of the property as well as the builder. The Real Estate Regulatory Authority (RERA) is a statutory body that aims to promote transparency and accountability in India’s real estate industry. This body was established after enactment of the Real Estate Regulatory Authority Act of 2016.

Stamp Duty in Eluru

Stamp duty is a tax imposed on sale of property by the state government. The stamp duty rate applicable in Elluru is as follows: 

Transaction TypeStamp Duty Rates 
Sale of immovable property 5%
Agreement of sale5%
Development agreement cum GPA5%
Construction agreement 5%
Construction agreement cum GPA 5%
Development agreement 5% 

Registration Charges in Eluru, Andhra Pradesh

It is essential to pay property registration charges in Andhra Pradesh to transfer the ownership of the property to your name. Here are the rates of registration charges applicable:

Description of Instrument Registration Charges 
Sale Deed 1%
Settlement0.5 % (Subject to a minimum of Rs.1000/-and maximum of Rs.10,000/-)
Agreement of Sale cum General Power of AttorneyINR 2000/-
Development Agreement cum General Power of Attorney 0.5 % (Subject to a maximum of Rs.20,000/-)  
Power of Attorney for Consideration0.5% (subject to a minimum of Rs.1,000/-and maximum of Rs.20,000/-)
Certificate of sale0.5%

Also Read: Guide for Khandwa Commercial Real Estate Investment

Eluru Commercial Real Estate Sector: What’s the Forecast?

Eluru is well known for its carpet weaving industry. The starting price of commercial properties in Eluru stands at ₹579 per square foot, and the average price is around ₹5,087 per square foot. Price trends recommend that both buying and selling property in Eluru is currently profitable. 

Real estate sector is witnessing a boom in Andhra Pradesh as the prices are becoming affordable. According to municipal administration minister Dr Adimulapu Suresh, several initiatives are being taken to create urban infrastructure to push the real estate sector’s growth. Therefore, it is truly worth it to invest in a commercial property in Eluru.

Commercial Real Estate vs Other Asset Classes

Here is the comparison between commercial real estate and other asset classes:

Commercial Real Estate vs Residential Real Estate

Residential real estate offers lower rental income in comparison to commercial real estate. Moreover, the vacancy risks in residential properties are higher than commercial real estate due to frequent tenant turnover.

Commercial Real Estate vs Bonds

Commercial real estate investments are less liquid than bonds due to their higher transaction costs and the long time it takes to find property buyers. Moreover, commercial real estate investment has credit risk associated with tenants who need to make timely lease payments. 

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Commercial Real Estate vs Stocks & Mutual Funds

Commercial real estate investments tend to offer stable & consistent returns in terms of rental income. However, stocks and mutual funds offer more returns and are highly liquid, which is not the case with real estate.

Commercial Real Estate vs Gold

Size of investment is much bigger in case of real estate. However, gold offers higher liquidity because the transaction value of real estate is quite high, and it might be time-consuming to find a suitable buyer. 

Here is a tabular representation of comparison between different types of assets on the basis of returns, liquidity, risk, volatility and ticket size:

ParametersCommercial Real EstateStocks & Mutual FundsGoldResidential Real EstateBonds
LiquidityLow High High Low Moderate 
RiskLow High Low Low Moderate 
VolatilityLow High Low Low Low 
Ticket SizeHigh Varies LowHighVaries 

Steps to Invest in Commercial Real Estate in Eluru

Here are the steps that you can follow to start investing in commercial real estate in Eluru:

Step 1: Fix a budget & come up with a list of localities that fulfil your investment requirements. 

Step 2: Plan a field visit to each of the locations and assess them based on infrastructure, connectivity, amenities, etc. 

Step 3: After finalising a property, prepare the official documents like encumbrance certificate, sale deed, agreement, tax receipts, etc. 

Step 4: Complete the payment process. Make sure to complete the registration and stamp duty formalities as well. 

Step 5: Lastly, consider purchasing an insurance policy for your property. 

Final Word

Known for its rug weaving and wool pile carpet industry, Eluru might be a great choice if you are interested to invest in commercial real estate. However, it is best to opt for a property that is RERA-approved so that you do not face any sort of issues in the future. 

Frequently Asked Questions

What is Eluru famous for?

Eluru is primarily a manufacturing city that is home to many textile and leather industries. It is also a centre for trade in rice, tobacco, sugar and oilseeds.

How is the rent of a property determined?

As such, there are no prescribed norms to determine the rent of a property. The market rent can easily be found by approaching registration authorities, brokers, etc. The rent of a property can be decided by its owner.

Why is it necessary to register a property?

By registering transactions of immovable property, it becomes a public record. You can only register the property to your name after paying the applicable registration charges.

What are the different types of commercial properties?

The different types of commercial properties that you can invest in are warehouses, storage facilities, shared workspaces, hotels, restaurants, retail stores, etc.

Was this helpful?

Anshul Gupta

IIT Roorkee Alumnus and CFA with experience of structuring debt products worth more than 15000Cr for institutional and retail investors.

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