Track2Realty 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.
