Potential for high-end apartments still untapped

BRIGHT PROSPECTS: Naren Rajan, Chief Executive of Tristar. — Photo: K. Ananthan  

THE REAL estate market in Coimbatore is going through a speculative mode thanks to the much talked about entry of software firms. Whether Information Technology firms come or not, Coimbatore has enough potential in terms of prospective clients for well developed high-end properties, feels Naren Rajan, Chief Executive of Tristar, a real estate development company. The market prospects have not reached saturation.

There is enough value for money in high-end apartments, houses, twin-houses that makes people prefer community living in terms of the in-built advantages such as security and common resources.

In such a property, electricity, plumbing and similar infrastructure requirements are taken care of by the maintenance staff.

Ranging from Rs. 15 lakhs, there are properties quoted around even Rs. 45 lakhs, depending on the amenities and location. The cost is never a deterrent for selling these houses as there is always value for money in these properties. These are just grabbed within a few weeks of announcement, which proves that there is potential, Mr. Rajan says.

Some of the high-end projects from Tristar such as Triyambhava at Kalapatti with 110 dwelling units and Trilok near GRD College with 230 units "received tremendous response forcing us to think and prepare for more such projects."

The property industry is at present catering to the existing demand and it is only preparing itself for a surge in demand when the IT firms open shops in Coimbatore.

Even today, when it comes to high-end properties, only 20 units are done and sold in a month in a Central Business District (CBD) or a Most Coveted Area (MCA).

High-end property promoters have only completed close to 5,000 units in the last two years. The growth of this textile city in the last two years in high-end categories of properties can be compared only to the growth that Anna Nagar in Chennai has witnessed.

Renga Villas, one of the apartment projects promoted by Tristar. — Photo: K. Ananthan

Renga Villas, one of the apartment projects promoted by Tristar. — Photo: K. Ananthan  

The workforce in textiles, jewellery, foundry, pump set units, light engineering, multinationals, bankers, finance firms and those dealing with fast moving consumer goods look out for such properties.

There is better scope if medical tourism could be promoted, showcasing Coimbatore as a destination.

Besides, education can be developed as another prospective industry. This can bring in better prospects, he says.

Given the high attrition rate and switching of operational headquarters which are quite common in IT industry, the software industry is only surviving on rented accommodations and was not keen on investing in properties.

The theory held good in respect of 70 per cent of IT firms and their employees in places such as Chennai and Bangalore. The industry is apprehensive about the arrival of the IT firms on two counts, one is the soaring land costs in Coimbatore and the other is infrastructure lacunae.

"Coimbatore is still being showcased as an ideal destination for software firms but we have not begun selling Coimbatore."

The present market rate of Rs. 10 crores an acre on a CBD or MCA such as Peelamedu will definitely deter IT firms or at least delay their arrival.

IT firms that Tristar has negotiated with looked at less expensive factors and lesser investments in assets, he says. The software firms have begun checking out for availability of facilities in Coimbatore and the property industry had just started getting a feel of it.

Given the manner in which Coimbatore city had grown over the last few decades, it is felt that the next phase of growth will revolve around Peelamedu.

Coimbatore city first had Range Gowder Street and Big Bazaar Street as the centre and then developed on all sides.

Now it is the turn for Peelamedu to witness growth. Given the number of educational institutions, hospitals and corporate houses that have come up on Avanashi Road and the proximity to airport, the stretch from UMS Signal to Kalapatti will witness a faster pace of growth, according to Mr. Rajan.

The growth is expected to revolve around a radius of seven km from the airport, he says.

IT firms and their employees believe in a "walk-to-work" policy, especially because of their odd hour work schedules.

Hence there is a pertinent need to develop infrastructure in the potential areas before the arrival of IT firms.

Keeping this in mind, the Confederation of Indian Industry has already completed a survey on widening Avanashi Road into a six-lane arterial road to accommodate more traffic.