Tag Archives: Industrial real estate

Coimbatore needs infra push for realty growth

Posted on by Track2Realty

Coimbatore Industrial Corridor, Coimbatore-Tirupur-Erode Industrial Corridor, Indian real estate news, indian realty news, India property market, Track2Realty, Industrial real estateTrack2Realty Exclusive: Coimbatore property market in many ways is an ideal investment paradise both for residential as well as commercial purposes. Its strategic location is also a traction point that attracts not only people in the South India but across the country. There are only a few property markets in India which has a fine balance between the residential and commercial developments, without one segment over-supplying and in the process over-shadowing the other.

What then stops Coimbatore to emerge as one of the major economic hubs? The answer to this in one single word is—Infrastructure. It is though debatable how far infrastructure in Coimbatore is lagging behind other major cities, yet what can be vouchsafed is that Coimbatore needs infra push for realty growth and big-ticket investments.

Infrastructure in Coimbatore has been a story of glass half full and half empty. While the city has seen tremendous growth of real estate in the last over a decade, the infrastructure has not kept pace with the urbanisation in the city. Having said that, Coimbatore’s infrastructure, both physical and social, is way ahead of many other tier-II and III cities in the South India and hence property buyers prefer this market ahead of any other market in the region. However, all the developers and analysts agree that the true potential of Coimbatore is yet to be unlocked and infra push can catalyse the urbanisation of the city on a fast forward mode.

As per the industry assessment, Coimbatore can have better infrastructure and higher growth in a range of sectors by addressing the challenges it faces now. Analysts believe it is high time that efforts must be made on to improve infrastructure and measures be taken on to expedite the Western bypass road development. The State Government should also focus on airport expansion and formation of a Greater Coimbatore Development Authority should be State-wide effort. The State should have four or five zones and development authorities constituted for each of these.

Now that the real estate across the country is looking for NRI buyers, Coimbatore has all the inherent potential to tap that segment and hence international buyers should be invited by showcasing state-of-the art hospitals, expertise, geographical advantages, better road infrastructure, adoption of technology by non-IT companies here, and finishing schools for some of the needs of the growth of the IT sector.

The real estate developers demand city planning with improved infrastructure is a must as Coimbatore has seen rapid urbanisation. The Master Plan should be finalised soon with more green cover for the city. They maintain what is urgently needed for better urban development is speedy approval of plans, and improved connectivity to suburban areas so that affordable housing projects are successful here. With increase migrant workers, the city today faces challenges in different areas such as health and urban development.

Ramakrishnan P, Deputy Managing Director, Sobha Developers disagrees that infrastructure is a challenge for big-ticket investments in the city. According to him, it is not entirely true that infrastructure is a challenge for big-ticket investments in Coimbatore. On a comparative basis, Coimbatore has better physical infrastructure vis-à-vis other Tier II & III cities in India. What is lacking is the determination by the concerned to look beyond tier I cities. The potential opportunity for growth in Tier II & III towns is exponential.

“Realty projects are, in fact, a resultant of a good industrial/services growth. It is a source of revenue to the local government. This, in turn, should help in paving the way for better infrastructure facilities,” says Ramakrishnan.

Sameer Chopra, Chairman, RE/MAX India, on the contrary, believes infrastructure has always been the major challenge in big ticket as well as small ticket investments in Coimbatore. Investing in land is always a risk. Money required for investment depends on the kind of plot-agricultural, commercial or residential-and ranges from lakhs to multiple millions, depending on the property type and location. Realtors should be very observant and smart in choosing the land space where the entry level costs are low and growth curve is high.

“Coimbatore is very much on the fast track to growth. With the upgradation of infrastructure facilities, the residential and commercial real estate segment in Coimbatore is set to grow exponentially in the coming years. Traffic is a major problem and therefore, the need of the hour is more arterial and scheme roads to provide better connectivity and ease traffic in prime areas,” says Chopra.

Some of the suggestions that analysts put forward for taking Coimbatore property market on a fast-forward mode are expanding the current international airport, completing the planned ring road within a short time, promoting more industrial park/SME hubs that focus on textile, engineering & automobile industries and creating better connectivity between various modes of transportation.

The developers maintain that the city market has just started maturing now and if the infra push is provided to them by the government, Coimbatore can well become one of the most developed cities of India. The very DNA of the city has it to make it a world class city, but then what comes in the way of potential and performance is the quality infrastructure, or rather lack of it.

Will infrastructure catch up in the city to make Coimbatore a property magnet ahead? Well, the developers wish so, the city desires this and policy makers promise their commitment to the cause.  All this promises a turnaround of Coimbatore property market, but then between the cup and the lip the real estate is apprehensive of any slip.

Coimbatore-Tirupur-Erode Industrial Corridor to ignite realty growth

Posted on by Track2Realty

Coimbatore Industrial Corridor, Coimbatore-Tirupur-Erode Industrial Corridor, Indian real estate news, indian realty news, India property market, Track2Realty, Industrial real estateTrack2Realty Exclusive: The proposed industrial corridors across the country are being seen as the catalysts to ignite the growth of the economy in general and real estate market in particular. In Coimbatore also, all eyes are set on the Coimbatore-Tirupur-Erode Industrial Corridor that promises to redefine the economy of the region with fresh influx of investment and increased economic activity in and around the industrial corridor.

The real estate developers have also sensed the potential of the region and a number of big ticket projects are being planned in this growth corridor. As a result, the market seems to be poised for high growth era in the next few years.

Analysts believe the conservative economy of the Coimbatore will no longer be the same and the urban landscape in this part of the world will soon compete with other major cities and metro cities in terms of investment. They believe even though the real estate market of Coimbatore is said to be one of the most progressive in India, the real growth of the property market is ahead and definitely not behind. It is generally believed that the trigger point would be the completion of Coimbatore-Tirupur-Erode Industrial Corridor. That will change the urban outlook and the economic model of the region completely.

Developers, on the other hand, feel that will be too late since the land prices will no longer be the same in this belt once the industrial corridor gets operational. They maintain the right time to launch the projects along the upcoming corridor is 2014 itself and many of them have either acquired the land or are planning to acquire it this year. It seems a number of high-end projects will be announced along this industrial corridor in the second half of the year, something that indicates the market getting into a fast forward mode soon.

“We are negotiating a large piece of land parcel along the Coimbatore-Tirupur-Erode Industrial Corridor and since the investment is huge, it is taking time to close the deal. But we are very clear about the growth potential of the region and hence our land acquisition is not just for the next project but with a pipeline visibility of a number of future projects,” says the marketing head of a real estate company requesting anonymity.

The developers’ optimism is not without merit or bereft of the ground realities. Already many of the SMEs and other industries have started setting their base in the region, in anticipation of fresh business opportunities in the next few years. And it is not just with the Tamil Nadu industrialists who are bullish on this market, rather many of the industries from Mumbai are also entering into this so far non-descript business destination.

Raj Koneru, Regional Owner RE/MAX Rest of the Tamil Nadu says Coimbatore-Tirupur-Erode Industrial Corridor will affect Coimbatore property market as it will contribute to industrial growth of the state, it will generate employment and bring migrant population. This is expected to boost real estate growth in the city.

“Coimbatore has by and large been dependent on textile; the Industrial Corridor will change the scenario. The land costs will phenomenally go up after Industrial Corridor becoming operational, also the construction cost are going to increase. Though Coimbatore stands low on current office market activity, the growing engineering and IT potential is sure to throw up opportunities for the real estate market in the next few years. The prices are marginally down by 5-10% in Coimbatore but the situation will not worsen any further,” says Koneru.

Some of the analysts point out that one of the fundamental reasons why the growth of the Coimbatore market, despite huge potential backed by excellent climatic conditions, has been mediocre is the fact that the economy of Coimbatore, Tamil Nadu’s largest industrial centre after Chennai, has largely been driven by the textile industry, followed by IT and healthcare sectors.

With demand mostly being driven by the locals, big ticket investors shied away from this market till very recently. But the growth dynamics are expected to change radically now with operationalisation of various planned infrastructure and commercial projects.

Knight Frank believes the dependence on the textile industry is a risk as the local economy is in doldrums due to heavy reliance on the textile industry. Rising interest rates and raw material costs have badly affected the industry. However, many big ticket projects that are coming up can change this dynamics completely.

For example, the region currently has two operational SEZs. Five more are expected to become operational over the next couple of years and these new SEZs will generate employment and bring migrant population. It obviously will change the demand & supply dynamics of the real estate market in and around Coimbatore.

A Jones Lang LaSalle assessment says Kochi-Coimbatore-Thiruvananthapuram is an emerging metropolitan hub and the Coimbatore-Tirupur-Erode Industrial Corridor will contribute to industrial growth of the state. Tirupur, which is 50 km from Coimbatore, contributes nearly 75 per cent to India’s textile exports. Coimbatore, known for its industries, has become a preferred destination for the IT sector, thanks to incentives given to IT companies by the Tamil Nadu Government.

In a nutshell, Coimbatore property market is all set to go on a high growth curve once the Coimbatore-Tirupur-Erode Industrial Corridor gets operational. But the growth has already been visible in a very significant manner and that indicates that smart developers have already decided to take the first movers’ advantage. Even from a buyers’ standpoint, there are significant gains in the pipeline. Though the property prices may go up but then the emerging economic opportunities and the resultant prosperity will balance the odds in favour of the average citizens of Coimbatore.