New Page 1

EVEN before the IT SEZ planned by the Electronics Corporation of Tamil Nadu (Elcot) could take shape, there seems to be a big rush for IT space among various corporates and developers in the city.

While city-based corporates like the Bannari Amman Group, Salzer group and KG group have come out with their plans on the IT front, many new commercial developers have also joined the bandwagon by getting formal SEZ approvals for their proposed projects.

Coimbatore Hi-Tech Infrastructure is planning to develop an IT SEZ over 60.73 acres at Keeranatham village and Span Ventures has got formal approval for 10.5 acres IT/ITeS SEZ at Eachanari.

The state-owned Tamil Nadu Industrial Development Corporation (Tidco), is also planning an IT park in the city suburbs. Rakindo Developers, a 50-50 joint venture between Vishwatej Projects and Rakeen, UAE, along with Tidco has proposed to develop feeder township, Residential and leisure facilities over 625 acres in the villages of Sundakamuthur, Perur Chettipalayam and Thithipalayam. The group also plans to promote an IT park on 25 acres at Perur village at Chettipalayam in south Coimbatore district. Bannari Group plans to develop an IT SEZ over 78 acres at Kalapatty village in Coimbatore and has got formal approval for around 60 acres. The entire process is likely to be completed in the next few months. Salzer plans to develop 1 lakh sq.ft. IT park in association with a US-based consulting service provider while KG group has acquired around 160 acres near its existing campus at

Saravanampatty for developing it as an ITES SEZ. I
According to sources in the property development business, by the end of 2009, approximately 10-15 million sq.ft, of new IT/ITeS space will enter the Coimbatore market.

1) Are NRIs allowed to invest in India?
Yes, NRIs can invest in all avenues open to resident Indians. Persons of Indian origin are restricted to investment in non-agricultural businesses in the country.

Coimbatore, located in the southern state of TamilNadu is known as the textile and engineering city of India. With its robust manufacturing sector, the city has also been emerged as a preferred destination for software companies who have established their offshore development centers in the city in the recent times.

The city boasts of a superb connectivity. Apart from a modern airport, Coimbatore has a well-developed network of broad gauge railway, six arterial roads, and three highways.

Direct flights to Singapore and Colombo have been proposed by Sri Lankan and Silk Airways.

This city of entrepreneurs also enjoys reputation of the highest revenue-earning district of Tamil Nadu.

Owing to its sheer manufacturing volumes of textiles, Coimbatore is called the ‘Manchester of South India’. Not just this, the small and medium sized engineering companies supply a substantial two-third of the India’s requirement of electric motors and pumps.

As for the service industry, the IT and IT enabled Services (ITeS) industry of Coimbatore is growing at a staggering pace. Corporate mammoths like Tata Consultancy Services (TCS) and Cognizant have already established their centers in the city.

The league is followed by other like ABT Infoserve, Ephronsys, Robert Bosch, Nous Infosystems, CG-Vak Software, Quattro, Pricol, Spheris and Sharp etc.

With its soaring industry and influx of capital by software companies, the Coimbatore real estate market is pretty upbeat.

Proposal of Rs 140 crore Software Technology Park has already paved way to real estate developers to plan their projects in consonance. Spread in about 14 acre, the park to be constructed at Avinashi Road will have all world-class facilities needed by software companies.

To add to it, the Electronics Corporation of Tamil Nadu (ECTN) has also laid ambitious plans to set up an IT Special Economic Zone (SEZ). The park is proposed at Keeranatham village and will sprawl in the area as large as 60.73 acre.

In view of joining the bandwagon, real estate developers in Coimbatore like Presidium Constructions, Bannari Amman Group, Salzer Group, Span Ventures and KG Group have also been exploring the possibilities of establishing IT parks in and around the city.

Given the trends, the commercial real estate segment of Coimbatore has been estimated to have the development of some 10-15 million sq. ft. of office space by the end of year 2009. The land prices in the prime market and residential areas of Coimbatore have shot by 40-100 per cent in the past 12 months. What has kept the builders in cool is that the demand is realistic and end-user driven.

The markets are so far free from speculative trends and that’s why the real estate boom in Coimbatore is believed as sustainable.

Prices in residential segment comprising houses and apartments hover between Rs 8-25 lakh and registered a rise of about 25-30 per cent in the last year.

Industry experts find pricing of properties in Coimbatore at reasonable levels. For instance, flats at Race Course and RS Puram are selling at Rs 2,000-Rs 2,200 psft. Rates at Saibaba Colony are at moderate Rs 1,500-Rs 1,600. Areas of Peelamedu also clock near Rs 1,500.

As per estimates, about 50 residential projects are in progress at different parts of Coimbatore and more than 3,000 apartments are likely to be developed under the same.

Vis-à-vis the number and size of construction projects coming up in the city, the property market in Coimbatore is set on the trajectory of high growth.

Investment at the sites in or around the major IT parks will fetch handsome returns in the next 3-5 years, experts say. Overall, the market fundamentals are strong and trends are realistically sound.

India’s real estate market is poised for tremendous growth potential with a wave of development and investment into these “exciting” assets. There is a discernible hunger for knowledge and interaction as developers and investors begin to penetrate the Indian real estate market.

Real Estate Investment World India 2007 is the gathering for experienced players in this growing market. It is a golden chance to bridge the gap and discover the real opportunities becoming available!

The Indian Real Estate Story

The Genesis

At the turn of the millennium, when multinationals began shifting their back-end offices to India and BPOs demanded vast office spaces to accommodate their staff, existing business districts in Indian metros could not match up to their requirements. Private builders established in metros found a way out by creating cyber cities and technology parks on low-priced land on the outskirts of metros, supplementing these workplaces with smart residential projects for their employees.

The Transformation

The success of one project led to another, and 7 years since then, the transformation of the Indian urban landscape is almost unbelievable. As the IT industry flourished, the barren patches of land in satellite towns attracted global attention, and cities like Gurgaon, Noida, Mohali, Pune, Bangalore and Hyderabad became investment hotspots.

The spillover was imminent, and Kolkata, Chennai, Ahmedabad, Visakhapatnam, Nagpur, Bhubaneswar and Thiruvananthapuram similarly leveraged on their skilled manpower to welcome the IT and biotech industry. Manufacturing, and services, which have performed remarkably well in the last few years, propelled cities like Jalandhar, Ghaziabad and Surat.

The urban landscape in India is currently undergoing a transmutation as the real estate wave engulfs low profile locations in Tier II and III cities. As incomes grow, and retail makes inroads, shopping malls and multiplexes, luxury and budget hotels, resorts and serviced apartments, residential townships and condominiums, IT Parks and Special Economic Zones are not the preserve of Tier I cities like Delhi, Mumbai, Bangalore, Hyderabad and Chennai anymore.

Inviting Global Attention

The Indian Government opened the doors of real estate to foreign direct investment as late as 2005. Waiting on the wings were a host of investors, currently 35 in number, who rushed in with funds that are expected to touch USD 10 billion by the end of 2007, from a figure of USD 4 billion in 2006.

The Tier II cities of Pune, Kolkata, Ahmedabad and Chandigarh, and the emerging Tier III cities are being viewed as lucrative investment projects by global equity players, venture capitalists and mutual funds.

Growing - Laterally and Vertically

Betting on the enormous potential of the real estate market in India, real estate developers from overseas have cut across all verticals to establish themselves in residential, commercial, hospitality, SEZs, health and infrastructure.

Indian real estate developers have not been found wanting either, adopting the latest construction technology to projects which meet global standards. Supported by round-the clock power and water supply, contemporary architecture and state-of-the art facilities in aesthetically designed environs, India’s real estate has much to offer.