Back Riding the realty boom
R.Y. Narayanan
| Billed as emerging IT hotspot, the city is bracing up for rising demand |
Apart from engineering industry and IT, there was enormous potential in healthcare and education and there was substantial demand from the user services in these sectors.
Coimbatore is in the grip of a construction fever. Whether it is plush apartments or medium budget houses or commercial/office complexes, the city has not witnessed such a frenetic construction activity in the past as it is seeing now.
According to conservative industry estimates, the number of residential tenements under construction now should be around 3,000 involving an investment of around Rs 500 crore. This is only from the organised players in the city. If one takes into consideration the value of homes/apartments being built by small builders and homes by individuals, the value of investment should be at least double of that figure, if not more.
Building on core strength
Always billed as one of the most liveable cities in the country, Coimbatore is finding that its core strength in the manufacturing sector, particularly in engineering and textiles, has given a new impetus to the real estate industry. More importantly, it has given it greater stability, as Coimbatore has also emerged as a global outsourcing hub for the manufacturing sector. But what has made the realty industry really hot is the fact that there is an air of expectancy about the rush of IT majors to Coimbatore.
The changing profile of the buyers has brought in its wake change in their expectations from the builders.
There has been a significant increase in the demand for luxury apartments and individual houses in the Rs 35-50 lakh plus range and recently investors lapped up the opportunity to buy apartments at a staggering price of up to Rs 1.50 crore in the posh Race Course area in the city.
Buyers have become more discerning and facilities that were earlier perceived to be luxuries like swimming pool, community hall, gym and R.O. plants have become necessities now.
Mr R. Rajahram, MD, Sri Renga Group
According to Mr R. Rajahram, Managing Director, Sri Renga Group of Companies, Coimbatore, which is into textiles and real estate development, the boom began even before there was talk about the entry of IT sector into Coimbatore. He was confident that it would last at least for the next 10 years, irrespective of IT majors' entry or not. His optimism was reinforced by the fact that the actual time taken for selling an entire project had come down from one year earlier to just a few months now.
He said apart from engineering industry and IT, there was enormous potential in healthcare and education and there was substantial demand from the user services in these sectors. Services like medical transcription have spawned huge demand for land and in fact, the construction of such a facility in Thondamuthur area on the outskirts of Coimbatore has sent the land price soaring there.
Mr V. Mohan, MD, Mayflower Enterprises
Mr.V.Mohan, Managing Director, Mayflower Enterprises Private Ltd, Coimbatore, said that unlike Bangalore or Mumbai, the real estate market in Coimbatore was not driven by speculation.
While there could be an element of investment buying, much of the purchase was made by the end users.
The market that was dull after the 1998 serial bomb blasts in the city recovered in 2002 and has been on a roll since last year.
There was a noticeable interest from NRIs hailing from nearby cities like Pollachi and Udhagamandalam in buying properties in Coimbatore.
Flood of projects
Mr Mohan said the investment in housing now in Coimbatore is the highest-ever witnessed. The demand in the high-end segment constituted only about 15-20 per cent. The rest of the apartments were of conventional type where the builders also try to provide value-added services. The fact that Avanashi road was a National Highway and most of the educational institutions were located on that road and the expectation that it would form the IT corridor have made land very expensive on that road.
He said one mall would come up on the Brooke Bond road and apart from the multiplex being put up by the Essel group another was expected to come up within the city. Any shopping mall would need 4-5 acres of land and some of the potential investors were looking for ideal locations.
He said for reasons of safety and as the quality of living is better, people have started preferring group housing projects. Such a concept has got very good future but land is not available within the city for promoting such schemes. It is time to think of developing satellite townships.
Changing buyers' profile
Mr V. Subramanian, ED, Ramani Realters
Mr V. Subramanian, Executive Director, Ramani Realters Pvt Ltd, Coimbatore, said the city was attracting people from across the country and NRIs from abroad because of its climate, the people's culture, the educational and health care facilities available etc. The exposure of the people here to the latest styles and facilities has made them demand the best specifications in terms of flooring and wall tiles, fittings and facilities like gym, swimming pool, R.O. plants etc. The buyers want elegant elevations and large rooms and cost was not a constraint to them.
He said in the 1990s, people were comfortable with the Rs 10-12 lakh price range for an apartment. But now the budget has gone up to Rs 25-35 lakh as the disposable income has gone up and the home loan rates have dived. The demand for flats in the 1,000 sf.ft-1,500 sq.ft was only 30 per cent while the larger flats have greater demand now. The age profile of the buyers has come down to 25-35 years and they want to put their parents in comfortable homes!
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