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Home , Economy of Tamil Nadu, Saravanampatti, Tidel Park

Emerging Hotspots in

July 2015 Tamil Nadu Second Largest Economy of

The Economy of Tamil Nadu is driven by the services and industrial sector which contribute to about 93% of the state’s income. This is due to the strong presence of service industries such as IT/ITES and BFSI (Banking, Financial services and Insurance) along with a strong industrial base. The service sector contributes about 63.7% of the state GSDP (Gross State Domestic Product). Tamil Nadu houses about 16% of India’s industrial workforce and contributes about 11% of India’s industrial output. It has a share of 28.5% of the state GSDP after the services sector. Automobiles, textile, electronics, leather, mining, fireworks and the presence of seaports contribute to the industrial sector of Tamil Nadu. Tamil Nadu has about 20 sea ports along the second longest coastline of India among which three are major ports. Among them, the Port and the Tuticorin Port are equipped with large container handling facilities. Per capita income of Tamil Nadu is much higher than the all India average per capita income of INR 24,143. This makes the state one of India’s major consumer markets.

FAST FACTS- ECONOMY

Per capita Income 8.4% INR 3rd Rank of India’s Gross Domestic Product in India with 6% of cumulative as on FY 2013-2014. Second 39,961 FDI inflows of USD 16 billion largest contributor. as on FY 2013-2014 (2000 to 2014)

2 Emerging Hotspots in Tamil Nadu Tamil Nadu has one of the best infrastructure facilities in the country, the highest production of and the largest number of airports, seaports, industrial corridors, hospitals and technical institutions. It has a production of 20,000 MW of power of which more than 8,000 MW is renewable energy. The state aims to be power surplus in another year.

Tamil Nadu also has excellent connectivity through road, rail, air, and water. The state has a road density of 153 kms per 100 sq kms, which is higher than the national average of 103 kms. It enjoys the facility of six airports of which three are international airports. The state also has good rail connectivity with more than 500 railway stations. With presence of about 48% of urban population in the state, Tamil Nadu has the best hospitals and universities in the country. More than 300 multispecialty hospitals are present in the state with 12,500 doctors. Tamil Nadu produces the largest pool of technical professionals especially in IT, computer sciences, electronics and telecommunications. With presence of more than 500 engineering colleges it holds about 17% share in India. Also the communication infrastructure in Tamil Nadu is advanced with the largest bandwidth and high speed utilization due to presence of three submarine cables, two of which connect from Chennai.

FAST FACTS- INFRA STRUCTURE

Contributes to 18% 28% of India’s technical institutions of India’s renewable energy present in Tamil Nadu which is the which is the highest among all states highest of all other states

42000 acres 8000+ MW 17% additional land bank Highest capacity of renewable Highest share of India’s total to be created by the state government factory output

Emerging Hotspots in Tamil NadU 3 Tamil Nadu is a state with rich cultural heritage, natural resources and remarkable architecture. The state houses cities and towns of economic, cultural and touristic importance. Chennai is the capital city of the state and is a key metro city of India. The city is also known as the Detroit of India due to large presence of automobile manufactures. Salem The economy of Tamil Nadu is well balanced by contributions from four key cities in the state – , Salem, Trichy and . These are the emerging hotspots of Tamil Nadu with planned infrastructure and economic COIMBATORE developments, and are expected to drive TRICHY the state economy in near future.

MADURAI

4 Emerging Hotspots in Tamil Nadu CHENNAI Detroit of India

Salem The City • Textile Industry, steel, sago and starch manufacturing and minerals • Steel SEZ and IT park planned

Coimbatore Manchester of • Textile Industry , Auto components, Wet Grinders, Pumps, Gems and jewelry • Emerging as an IT/ITES hub

Trichy Rockfort City • Engineering equipment manufacturing, fabrication and synthetic gems manufacturing • Emerging as an IT/ITES hub

Madurai The Athens of East • and Rubber based Industry • Emerging as an IT/ITES hub

Emerging Hotspots in Tamil NadU 5 Coimbatore FAST FACTS 1.6 million Population as per 2011census The economy of Coimbatore is largely dependent on industrial developments with the presence of auto components, textiles and . It is also emerging as the key IT/ ITES hub of Tamil Nadu 257 sq kms Coimbatore Metropolitan Area after Chennai. IT giants such as , Bosch, HCL, , are already operational in Coimbatore and are likely to grow in the next few years. The availability of excellent talent pool due 3 million sq ft to the presence of reputed colleges in the city is the key attraction Commercial office space operational for IT/ITES firms followed by availability of good infrastructure. The planned Coimbatore-Tirupur Industrial Corridor is likely to cause a surge in the industrial development of the city further. The 2nd above developments make Coimbatore one of the key real estate Tidel Park in Tamil Nadu with BUA of hotspots of Tamil Nadu. 1.7 mn sq ft

HIGHLIGHTS

Coimbatore has 750 hospitals with about 5000 beds Real Estate Development Coimbatore health care industry is estimated at INR1500 crores. The major private players are: PSG, GKNM, KMCH and Ganga Hospital. The Over 200 acres of IT Campus under development Establishment of Global Quality Nursing and Para Real estate development in Coimbatore is driven by both industrial Medical Training Institute and a Medi-City with an and IT/ITES sector. There are two IT Parks in the city. The ELCOT investment of about INR. 50 crores is proposed. IT Park located at Village is proposed to develop Educational hub of South India with 7 about 4 million sq ft in 56 acres. Phase 1 is operational with 1.8 universities, 78 engineering colleges million sq ft of IT SEZ office space. Wipro, Bosch, Cameron, HCL A world class Knowledge hub is proposed along technologies etc. are operating from this IT Park. CHIL IT SEZ is the NH-47 covering Coimbatore, Tirupur, another development located at Saravanampatti spread across and Salem. About INR 750 crores of investment is 150 acres. Cognizant, Dell, Bosch etc. are already operational planned for this knowledge hub. Several institutions in this SEZ. Coimbatore has a total of about 3 million sq ft of catering to higher education have bought land in office stock and about another 11 million sq ft is proposed. These this zone. This is likely to strengthen the availability developments have resulted in strong demand for apartments and of talent pool in Coimbatore. villas in the city. Several developers have launched their residential projects in Coimbatore. With growth in spending capacity, About INR 25,000 crores of investment Coimbatore has also witnessed the development of branded planned for development of retail. There are two popular malls in the city - Brookefields Mall industries by 2020 at Krishnasamy Road and Fun Republic Mall at Avinashi Road. Industrial sector is the key economic driver of The Tamil Nadu government has also proposed a Bio park in Coimbatore. There are three industrial corridors Coimbatore. which are being developed. They are Coimbatore- Salem Industrial Corridor – Manufacturing and Business Investments Region – I&II, Coimbatore- Salem Industrial Corridor – Agri Business Investment Region (ABIR), Coimbatore-Madurai Industrial Corridor. In addition to this, industrial parks are being developed to encourage the development of Small and medium-sized enterprises.

6 Emerging Hotspots in Tamil Nadu MADURAI FAST FACTS 1.0 million Population as per 2011census The economy of Madurai is also dependent on industrial developments like Coimbatore and Trichy with presence of rubber and textile manufacturing. Major automobile firms source their rubber components 247 sq kms Madurai Metropolitan Area from the industries in Madurai. Madurai also has a strong agro based industry. Along with this Madurai also has many small scale industries which contribute significantly to the economic growth of the city. As the 80% End users Tamil Nadu state is strongly promoting the growth of IT/ ITES industry Madurai residential real estate market is end user driven in the state, they have developed the infrastructure required for such development in Madurai. These developments along with availability of good infrastructure has resulted in a surge of the real estate 60+ development in Madurai. The above developments make Madurai Madurai has more than 60 health care another important real estate hotspot of Tamil Nadu. facilities in the city

HIGHLIGHTS

Madurai has an international airport with an area of 502 acres. It is also Real Estate Development well connected by air and rail. Madurai international airport has improved both domestic and international connectivity of the city. Three IT SEZs of more than 270 acre under In addition to this the Madurai-Tuticorin industrial development corridor is being developed which will connect the Real estate development in Madurai is largely driven by industrial airport and the sea port. developments and tourism. It is slowly emerging as an IT/ITES hub with three IT SEZs under developments. They are ELCOT’s SEZ in Madurai Kamaraj University has 97 29 acres at IIandaikulam village, Integrated Information Technology Colleges and 19 Institutions with campus, an SEZ in 213 acres at Vadapalanji village and an SEZ about 130,000 students developed by RR Industries in Sholankurini. Due to low attrition Madurai houses one of the best educational rates and availability of manpower, Madurai attracted IT majors facilities in the country with presence of reputed like Honey well, HCL, Oracle and Sutherland Global Services. The and old colleges. The city also has seven presence of large scale industries along with the growth in IT/ITES engineering colleges and two medical colleges in sector promoted the development of residential projects in the city. addition to the Madurai Kamaraj University. About 25-30 developers have launched their residential projects in A four geared Southern Prosperity Madurai. There are two malls operational in Madurai. They are the Through Enhanced Economic Vishaal de Mall, Milan‘em Mall to cater to the retail requirements Development (SPEED) of the city. In Tamil, people call Madurai as noonga nagaram (The The SPEED initiative is being planned for the city that never sleeps) with famous eateries and good connecivity industrial development along the Madurai-Tuticorin of public transport 24/7 connecting across state. Trade hub for all industrial corridor .This is to connect Madurai- the villages in about 100 kms makes this city live 24/7. manufacturing hub and Tuticorin port which is TVS Srichakra has entered into a contract manufacturing the export-cum-services hub in the southern end agreement to make two-wheeler tyres under the Michelin brand. separated by a distance of 135 kms. The SPEED The annual manufacturing capacity will be 3.6 million tyres. Amway strategy will also implement a Knowledge Corridor has set up a Rs. 500 crore plant in Nilakottai for a greenfield along Madurai, Virudhunagar and and a manufacturing plant. Tourism Corridor along Madurai, and Ramanathapuram

Emerging Hotspots in Tamil NadU 7 TRICHY FAST FACTS 1st In India for Boiler , Windmill Manufacturing The economy of Trichy is largely dependent on industrial developments with presence of engineering equipment manufacturing, fabrication and synthetic gems manufacturing. 0.9 million The important industries are Bharat Heavy Electrical Ltd. (BHEL), Population as per 2011census Ordinance Factory (OFT) , Heavy Alloy Penetration Project (HAPP), Golden Rock Railway Work Shop, and Loco Sheds. It is also emerging as the key IT/ ITES hub of Tamil Nadu after Chennai 167 sq kms Trichy Corporation area and Coimbatore, more as an alternative BPO destination. The availability of excellent talent pool makes Trichy one of the key real estate hotspots of Tamil Nadu especially for the IT/ITES sector. 400 acres Area under Trichy International Airport

HIGHLIGHTS

Emerging as IT/ITES Destination for BPO operations The city is slowly emerging as an IT/ITES hub with development of its first IT Park by ELCOT. HCL Info Real Estate Development system, Integra , Zylog, Take Solutions are constructing their facilities within this IT Park. BPO giants such as , First Source, Omega ELCOT IT SEZ, a 50 acre project under construction Health Care, Sutherland Global, and DSM Soft etc Real estate development in Trichy is driven largely by industrial are already operational in Trichy and are likely to developments. Presence of large scale industries along with the increase their headcount in the coming years. growth in IT/ITES sector surged the development of residential 3 universities and 30 engineering projects in the city. Several developers have launched their colleges and produces about 22,000 residential projects in Trichy . Average Residential capital values graduates annually in Thillainagar range between INR 6000 to 8000 per sq.ft, Trichy is home to several reputed educational and Cantonment and Collector office Road witnessed an aproximate of research institutes. Cancer Research Institute, INR 5000 to 6500 per sq.ft. The city has Residential supply of Over Medical Research Institute and Agricultural Research 800 units per annum with absorption of 600 to 700 units every Institute are the national research institutes year. present in Trichy. Reputed institutes such as Indian With growth in spending capacity, Trichy witnessed development Institute of Management, St. Joseph Institute and of branded retail. Reputed brands like LifeStyle, Arvind Stores, Bharathidasan Institute of Management are also Max Life style are already operational in the city. There is one present in Trichy. operational mall in the city called Femina Shopping Mall. Two About 12,322 manufacturing units with other malls are proposed. Trichy has 230 hospitals and 2 medical about 114,064 employees colleges. The industrial sector is the key economic driver in Trichy. Bharat Heavy Electricals Limited has its high pressure boiler manufacturing facility here. There are few other large manufacturing firms along with SME manufacturing firms. The SMEs employ about 18,000 people. The large industries include weapon manufacturing plants and railway locomotives along the industrial corridor. In addition to this, industrial parks are being developed to encourage the development of Small and medium-sized enterprises.

8 Emerging Hotspots in Tamil Nadu SALEM FAST FACTS

The economy of Salem is largely dependent on agro based industrial 0.8 million developments and steel industry. SAIL’s Salem Steel Plant along with Population as per 2011census Salem Starch and Sago Manufacturers Service Industrial Co-operative Society Limited (SAGOSERVE) form the core of the manufacturing base. The city also has many textile mills. The state of Tamil Nadu is promoting 247 sq kms the development of IT/ITES industry with a proposed IT Park. These Salem Corporation area developments are planned to etch a new growth path for Salem. This will make Salem the next real estate hotspot driven by the infrastructure developments and industrial developments 1st Rank In world’s tapioca production which produces sago and starch

HIGHLIGHTS

Salem has a domestic airport spreading across 136 acres Salem airport has been instrumental in improving domestic connectivity. Salem is also well Real Estate Development connected by road and rail. Salem is an important junction that connects major South Indian Cities ELCOT IT SEZ of 150 acres and SALEM STEEL SEZ of 250 acres to drive real estate demand 2 universities and 8 engineering colleges and 4 medical colleges Real estate development in Salem is driven largely by industrial Salem houses good educational facilities in the developments. It is yet to emerge as an IT/ITES hub with the country with the presence of both medical and development of its first IT Park. The presence of large scale engineering colleges. industries has resulted in the development of residential projects in the city. With growth in spending capacity, Salem is also witnessing development of retail. Kanda Swarna Shopping Mall is the biggest Expansion and modernisation of Salem retail development in the city. Branded retail is yet to strengthen Steel Plant with development size of its presence in the city. However there are a few brands such as over 1130 acres Nike, Adidas, Reebok and Puma that have started operations in Salem has one of the largest deposits in the city. India. Companies like Dalmia and TANMAG have mines in Salem.The city is also home to various companies from the steel, textile and other agro based industries. About 34000 hectares of land is under tapioca cultivation and also contains 650 units for tapioca processing which is largest in the world.

Emerging Hotspots in Tamil NadU 9 Authors

Jerry Kingsley Local Director, Markets [email protected] +91 9884621229 Jerry has over 110 months of Real Estate experience. Based out of Chennai; Jerry manages several accounts cross different industry segments like IT, ITES, BFSI, Manufacturing, Industrial and Warehousing. Jerry has been involved in the different facets of the real estate consultancy business like developer representation, investment sales, brokerage, project feasibility, valuations, research, land disposals; land acquisitions, industrial and warehousing related assignments. Jerry has completed his Post Graduate Diploma in Business Management (PGDBM) and also holds a Bachelor’s Degree in Engineering with specialization in Electronics and Communications.

Trivita Roy Associate Director, Research & REIS [email protected] +91 80 4031 4833 Trivita Roy has joined JLL Research team in 2007.Based out of ; she manages the south India research operations. She also contributes to topical whitepapers, property market digest and research deliverables on industrial, commercial, retail and residential real estate markets in India. She is also responsible for Indian real estate intelligence service (REIS) Trivita is trained as City Planner from Indian Institute of Technology Kharagpur besides being an architect and also holds a Diploma in Executive Global Business Management from Indian Institute of Management Calcutta. She has nine years of experience in real estate research.

For research enquiries, please contact:

Ashutosh Limaye Head, Research and REIS +91 22 3985 1319 [email protected]

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