A study by global real estate intelligence provider Jone Lang Lasalle Megharaj said a number of overseas developers have invested on various residential, commercial, retail and hotel projects in the city apart from government agencies like Tamil Nadu Industrial Development Corporation (Tidco) and Electronic Corporation of Tamil Nadu (Elcot) to drive the realty sector growth.
The study pointed out that Coimbatore has got all ingredients to become a prominent tier-II city. It is well known for its textile industries and has excellent potential for industrial growth.
The textile capital of Tamil Nadu also has more than 50,000 small, medium and large scale industries that serve the engineering needs of the country.
Recently, the textile ministry has entrusted South India Textile Research Association to develop Coimbatore as a centre of excellence for production of medical textile products also called as Meditech.
Moreover, the Tamil Nadu government is taking giant steps on the information technology front to develop Coimbatore as a prominent tier-II destination.
Apart from textile mills, Coimbatore houses motor pump sets and other engineering industries.
"Coimbatore is all set to scale new heights as a preferred destination for corporates to expand their business presence. The migration of top multi-nationals into this city is driving the growth in retail, hospitality, entertainment and residential sectors. In next 4-5 years, the city is likely to add close to one lakh jobs which will in turn contribute to the growth in the per capita income of the city", said Ramesh Nair, managing director, (Chennai & Hyderabad), Jones Lang Lasalle Meghraj.
The office market in Coimbatore is primarily driven by the IT/ ITeS, banking, textile and auto ancillary industries. The city that was known for its industrial occupants has transformed into a preferred destination IT/ITeS as a result of lucrative incentives given by the Tamil Nadu government, he said.
According to the study, the demand in residential market is driven by the growth of IT/ ITeS and other domestic industries and people in Coimbatore consider investment in property the best form of investment.
The residential market in Coimbatore is likely to witness a future supply of more than 3300 dwelling units by the end of 2010. Over and above this, there are over 1100 dwelling units that are proposed.
"A strong entrepreneurial spirit of the population has resulted in availability of capital amongst the local land lords of Coimbatore.
Such a city, whose growth was primarily driven by industrial development, has taken a paradigm shift towards metropolitan culture and as a result the demand for real estate grew over the years to reach the growth phase of the industry life cycle," said Ramesh.
The retail market in Coimbatore is segmented into high streets and retail malls. The prime retail activity happens around the south eastern part of Coimbatore, which includes Avinsahi Road, Trichy Road, RS Puram and Metupalayam Road. The presence of an upmarket populace living in the neighborhood of these areas is an added advantage for spur in retail activity. Hospitality sector in Coimbatore is dynamic due to the business climate prevailing given the rapid IT development and growth in the textile and the automobile industry.
The hotels have seen more than 60% occupancy rate during the off peak season and it goes up to 90% due to the presence of major textile mills , foundry units and pumps & auto component manufacturing base.