Residential space: Coimbatore spins a growth story
The textile city of Coimbatore is witnessing initial signs of surge in demand for residential space. The pleasant climate and sweet Siruvani water had turned this centrally-located industrial city in Tamil Nadu into a retirement haven. But today the culture is changing and more people are buying homes here as an investment option.
Renowned for its cosmopolitan outlook due to influx of north Indians generations ago, the people in the city were mainly dependent on manufacturing industries. But with the development of infrastructure in IT space and enormous growth in retail, a huge flow of population is expected to come into Coimbatore in the next few years.
“The Tidel Park, which will be ready in 2010, is expected to bring in direct employment for 12,000 people and at least half of them will require residential space,” said Builders’ Association of India (BAI) Coimbatore chapter’s vice-chairman C T Narayanan.
He expects demand for residential space to improve drastically in the coming years. “By January 2011, the industry will be back to its good days,” he said.
Sankar Foundation, MD, Omkar Sankar, too painted a positive picture “The sector is slowly getting better as investor confidence has come back. We are seeing a lot of confirmations unlike a few months ago,” he said, adding that the builders were quoting 10% less on the price front compared to last year.
“The land rates are still high but we are trying to move ahead in business by reducing our profit margin,” said Mr Narayanan. He added that the prices never dropped in Coimbatore on the realty front even during the recessionary phase.
“Coimbatore’s property market is showing signs of recovery with several companies seeking a presence in the city. However, the word of caution is that prices should remain reasonable due to sustained demand and more investments,” said Jones Lang LaSalle Meghraj MD Ramesh Nair. He told SundayET that the year 2010 definitely looks better than 2008 and 2009. “Compared to other cities in the tier II and III arena, prices were realistic in Coimbatore and there wasn’t any major downward trend seen during recession,” he added.
Sreevatsa Real Estates MD C S Ramaswamy said, enquiries have increased and conversions are happening now. Even big players in the realty segment like Sahara, which announced projects long back in Coimbatore, have expedited construction activity, he added. Recently, Rakindo too announced the starting of Kovai Hills project in the city. The residential projects are mainly taking place in the outskirts of the city like Saravanampatti, Vadavalli and Mettupalayam Road as the main areas such as Race Course cannot support anymore projects.
“The increasing enquiry in the last three months doesn’t mean that the industry has recovered from recession. The enquiries will have to be converted into sales or occupancy,” Mr Nair cautioned. He, however, credited the city for its adaptability to changing market conditions. “The builders reduced the sizes of apartments and cut down on amenities to make sure apartments are more affordable,” he said.
BAI Coimbatore chapter chairman D R Sekar added, the houses in the Rs 20-40 lakh range are moving well. “It is only the higher budget ones that are seeing sluggish movement,” he added. The enquiries on the commercial front are yet to pick up, added Mr Nair. “Most of the SEZ projects planned in Coimbatore haven’t taken off. But we expect demand for office space to grow in the coming months,” he sai
