Real estate price esclation worries..
COIMBATORE is witnessing a sharp increase in land prices as it emerges as a favoured IT destination. Investments are also pouring into the city in the textile, engineering and auto sectors. Though the city has adequate land supply, the price spurt threatens to deter prospective investors from venturing into the city. Escalating land cost is also worrying the state-owned Electronics Corporation of Tamil Nadu (Elcot), which is scouting for 250-1,000 acres for developing IT parks, and Coimbatore Airport, which requires about 350 acres for expansion. According to industry and market circles, finding land at reasonable prices for expansion even on the outskirts is becoming a problem for many local units. Land located about 30 km from the city, which was quoting around Rs 2 lakh an acre a year ago, now quotes around Rs 1 crore an acre.In more distant areas, the price has escalated from about Rs 60,000 an acre a year ago to more than Rs 15 lakh. Mr S V Arumugam, chairman, Southern India Mills Association , said: “The artificial pricing of land poses a problem. Even local textile mills that are in expansion mode, enthused by the continuation of Technology Upgradation Fund scheme, are now apprehensive about putting up new units”. According to Mr K Ilango, vice president, Coimbatore District Small Industries Association (Codissia), the prices are unrealistic. Any investor will have to consider the viability of investing so much on land alone. However, realty sources feel that prices have increased only in some pockets in the eastern and northern parts of the city due to the surge in demand. Coimbatore is said to have 82 projects in its kitty with an estimated investment of Rs 7,352 crore.
