Guide for Karur Commercial Real Estate Investment

Karur, located in Tamil Nadu is an industrial town that has gained popularity for the production of home textile products. It has emerged to be the centre of the trade process. This place has gained immense popularity because of manufacturing hosiery products. 

Karur which started with export on a modest scale now houses thousands of exporters, thereby ensuring the supply of products towards famous chain stores. Trading of home textile products from Karur to different parts of the country is what makes Karur stands out. 

To know more about the different aspects of commercial real estate investments in Karur, Tamil Nadu, go through the following sections. 

Top Reasons to Invest in Commercial Real Estate in Karur

Here are some of the notable reasons why your commercial real estate investment plan in Karur is going to prove rewarding.

• Textile industries

Karur is considered to be a significant home textile hub. Kitchen linens, bed linens, wall hangings etc., are some of the product groups that are produced here and are exported in bulk. Dyeing factories, weaving, ginning and spinning mills are some of the Allied industries that give out employment opportunities to around 300,000 individuals. This place also houses Karur Textile Park Limited. ₹130 crores have been invested to set up this integrated Textile Park in Karur which aims to strengthen the commercial operations of textile industries.

The Karur Textile Park Limited (KTPL) with its robust functioning has emerged to be a significant export zone, taking home textiles outside India. 

• Agricultural centre

The agricultural sector is the mainstay of the Indian economy it provides employment to a majority of Indian population and a strong agricultural sector essential for ensuring food security – And Karur in Tamil Nadu stands as a doyen of agricultural prosperity. 

Around 19% of the total land area of Karur is utilised for agricultural purposes thus boosting the primary sector. Some of the major crops that are grown here are rice, cotton, oil seeds and sugarcane. In the uplands, one can also notice the extravagant production of millets like sorghum, and pearl millet and pulses like Red gram. This also assumes special significance in the context of the year 2023 which has been declared the ‘International Year of Millets.’ Even horticultural crops like banana, mango, coconut etc., are also grown in this region.  

Furthermore, the presence of proper irrigation channels in this region has further provided a boost to Karur thereby turning it into an agricultural powerhouse. The most significant among these irrigation channels is the Cauvery irrigation channel that covers both Karur and Manmangalam taluks. Colossal production of these agricultural products in Karur has made it a strong commercial centre.

• Bus body/coach manufacturing centre

The easiest and most basic mode of transportation that dominates the Indian roads is bus and Karur boosts this sector by being a prime bus body/coach manufacturing centre. Karur is hailed all across South India for being a place favourable to multifaceted industries – from agriculture to textiles, from manufacturing hubs to newsprint. 

The bus body/coach manufacturing prowess of Karur can be estimated by the fact that approximately ₹ 1000 crore per annum is said to be the business turnover in this sector.  This production constitutes a significant market share of around 70% of total bus coaches.

• Other Miscellaneous Manufacturing sectors

Karur as a major agricultural, industrial and manufacturing hub has not limited itself to only textiles and bus bodies/coaches but has transgressed and expanded into several other spheres of manufactured commodities which are a necessity in the modern-day household and one such article is mosquito nets.

It is significant to note that around 60% of the total mosquito nets in India are produced in the city of Karur in the coastal state of Tamil Nadu. It is estimated that approximately 2000 production units have been employed in manufacturing of a monofilament yarn named High-density Polyethylene (HDPE) and other products associated with this and what’s even more astonishing is the employment that this sector generates – and this number stands at an astounding 50,000 individuals.

Karur has recorded its name in the annals of modern-day history by becoming the world’s largest and simultaneously, Asia’s second-largest manufacturer of bagasse-based paper. The expanse of this achievement can be understood by complementing it with some mind-boggling data which stands as testimony to Karur’s manufacturing brilliance – approximately 230,000 tonnes of writing and printing paper is manufactured in Karur.  

• Robust Transportation system

Transportation is one of the most basic and noticeable aspects which acts as believable evidence to showcase development and ease of living in any area. Karur houses well-maintained road and railway networks. For instance, two National Highways (NH 44 and NH 67) pass through this city, which links Karur to different parts of the country. Even several long-distance buses are functional in this city. Karur Junction railway station, which is also an A-grade junction is one of the main railway junctions in the region. 

Commercial Real Estate Investment Opportunities in Karur

Mentioned below are some of the best sites that will aid the growth of your commercial real estate investment plan.

• Kulithalai

Kulithali, located in Karur district is among the best commercial property sites. As the place is part of the Cauvery delta region, the main occupation is based on agriculture. The economic base of this place is largely influenced by the allied agro-based industries. Some of the prominent industries here are oil mills, rice mills, coir manufacturing units etc. Kulithali has emerged to be a trading centre for villages surrounding it.  In addition, the commercial real estate sector here is boosted by the presence of a strong road and railway network.

• Puliyur

Puliyur is another locality in Karur district favourable for commercial real estate investment. This place holds resources that aid the growth of industries, especially cement plants. Even the transportation sector in this region is also improved.

• Thanthonimalai

Another location which you can consider for commercial real estate investment is Thanthonimalai.  This place is not only a famous tourist spot but also has components that will give rise to industries. You can consider exploring agricultural and household industries. 

Things to Consider Before Investing in a Commercial Property in Karur

Make an informed decision while investing in a commercial property in Karur by considering the following factors.

• Overall Quality

Before investing in commercial real estate it is important to put yourself in the shoes of the customer. Not only should the property look swanky from outside but also be constructed of good quality materials. The strength of the walls, quality of flooring, colour used, quality of window frames should also be examined so that your investment is worth it inside out.

• RERA Compliance

In order to keep a watch on the real estate sector of India every state and Union Territory has come up with a RERA body of their own. Real Estate Regulatory Authority is a body that takes care of accountability and transparency of real estate sector in India. This body came into action after enactment of Real Estate Regulatory Authority Act of 2016.

Stamp Duty in Karur

There is no rebate on stamp duty and registration charges for women In Tamil Nadu. The rates are the same for men, women and joint property owners to maintain the eqaulity. 

Registration Charge in Karur

You also have to pay registration charges that vary depending on the document category. 

Karur Commercial Real Estate Sector- What’s the Forecast?

India is heading towards being a major economic powerhouse in the world and is already being seen by industry experts as an ideal destination to invest in near future. And in this regard, the city of Karur in Tamil Nadu stands out. The presence of robust infrastructure, transportation and a plethora of manufacturing industries of varying commodities make Karur an ideal destination for investors willing to invest and expand, not only in India but all across the world. 

And what’s more interesting is the forecast of a boom in the bus body/coach manufacturing industry which can generate employment and also transform the area as well as the state’s secondary sector which essentially corresponds to manufacturing commodities. 

The exporters and textile manufacturers in Karur have asked to integrate a textile wet processing park. Even the industry representative has urged to set up a Common Effluent Treatment Plant (CETP). Even the industries have come together to urge the Ministry of Textiles (MoT) to set up an integrated textile trade facilitation centre which will help in marketing the products that are manufactured in Karur. 

If the MoT takes into consideration all the aspects made by the exporters and addresses all the demands, it will help them attain a business turnover of ₹25,000 crore by FY 2030. Even the Indian paper industry located here has ambitious plans to expand rapidly.

Commercial Real Estate Vs Other Asset Classes

You can see the differences between commercial real estate and different asset classes in the section below. 

• Commercial Real Estate Vs Stocks and Mutual Fund

You can earn higher returns from mutual funds and stocks, but not having adequate knowledge regarding the market can dilute your profits. A mutual fund is invested in different monetary instruments like corporate bonds, equities, and more. The value of these instruments can keep changing which can result in the loss of lump sum money.  On the contrary, with commercial real estate investment, you do not have such risks. 

• Commercial Real Estate vs Gold

Not only does gold fit both short and long-term investment, but it can also be liquidated very easily and fund monetary exigencies. However, the return that one earns from gold fluctuates depending on the market condition. Moreover, it has a chance of getting stolen. Commercial real estate investment, on the other hand, helps one earn higher returns without facing volatility. With commercial real estate, you can also have a rental income.

• Commercial Real Estate vs Residential Real Estate

Commercial real estate investment comes with higher profitability potential and long-duration leases. In addition, it also has multi-tenant potential. On the other hand, residential real estate comes with higher vacancy risk and has comparatively lower profitability potential. 

• Commercial Real Estate Vs Bonds

With bond investment, you can have guaranteed payment. The constant value of the bonds helps you enjoy a predictable income. Commercial real estate investment enables you to earn higher returns via appreciation in the property value. 

If you are interested in earning a fixed return and avoiding risks, invest in bonds. In this regard, you can explore our website for investing in top-rated bonds. 

Look at the table to see the comparison between different asset classes in terms of returns, risks, ticket size, volatility and liquidity.

Steps to Invest in Commercial Real Estate in Karur

Mentioned below are the steps that are to be followed while investing in a commercial real estate investment in Karur:

Step 1: On the basis of your finances, set a budget. 

Step 2: Now, move ahead with property search. Search for locations that will bestow you with a higher return on investment and has infrastructural prospects. 

Step 3: For streamlining the search, you can take help from real estate agents. They can give you deep insights into market dynamics, locality, availability of amenities etc. 

Step 4: Finalise a property that will help accomplish your business goals. However, ensure that the property is RERA-registered. After this pay for the property.

Step 5: Keep all official documents like sale deed, building approval plan, encumbrance certificate etc., in order. 

Step 6: To transfer the property ownership, clear payments for stamp duty and registration charges. Pay the service charges if any.

Step 7: Lastly, opt for a comprehensive insurance plan and cover your newly-bought property from damages. 

Final Word

Owing to its strong industrial base, Karur has flourished to be a lucrative destination for commercial real estate investment. The agriculture, textile and other miscellaneous units in Karur are contributing significantly towards the economy which has got the region massive potential for commercial real estate investment. However, to make the investment rewarding, you must be well aware of the particularities of the investment scopes here. 

Frequently Asked Questions

1. Which is the nearest airport in Karur?

Tiruchirapalli International Airport is the nearest airport to Karur. This domestic and international airport is situated at a distance of 78 km. The second nearest airport is Salem Airport located at a distance of 116 km.

2. What are the main benefits of RERA?

Here are the following advantages of RERA:

• Under the RERA Act, the buyer has the right to put forward their grievances if they have seen any discrepancy during the property transaction.
• Investors have the right to fetch all property-related information.
• Under provisions of RERA, real estate developers must mention the due date for the possession of the flat.

3. What is the population of Karur?

Karur is the 15^th most populous city in Tamil Nadu. According to 2011 census, Karur had a population of 10,64,493 lakh. Out of which female population is 5,36,309 lakh and male population is 5,28,184 lakh. 

4. What is a lease?

As per section 105 of Transfer of Property Act 1882, lease is transfer of rights of a property for a particular period in exchange for money. This right is transferred from a lessor(owner of the property) to a lessee(one who is requesting ownership).