Guide for Sivakasi Commercial Real Estate Investment

11 min read • Updated 11 May 2023
Written by Anshul Gupta

Table of Contents

Sivakasi, located in Tamil Nadu is flourishing to be an industrial centre. The presence of match and firecracker plants has transformed this town into a strong industrial hub. A colossal production of safety matches, diaries, calendars and other stationery items comes from Sivakasi.

In addition, this town is home to printing industries which manufacture around 70% of the country’s total production of papers which not only increases employment opportunities but also lays out avenues for those willing to invest in commercial real estate. 

To know more about investment scopes in Sivakasi, go through the following sections!

Top Reasons to Invest in Commercial Real Estate in Sivakasi

You can choose to invest in commercial real estate in Sivakasi because of the following reasons. 

  • Strong Industrial Base

Economy of Sivakasi is highly dependent on printing, matchbox manufacturing and in producing firecrackers. Around 520 printing units, 32 chemical factories, flour mills, and soda factories are there in this town. In addition, you can find around 1,070 registered firecracker manufacturing companies here which have extended 8 lakh of direct and indirect employment generation. Owing to the development of industries, Pandit Jawaharlal Nehru had regarded Sivakasi as ‘Mini Japan’.

Sivakasi also stands out for being top producers of diaries which constitute 30% of the diary production in India. The printing industry which was initially set for printing firecrackers and labels has later, under modern machinery, flourished to be a major printing hub. 

  • Strong Transportation System 

Even the road and railway networks in Sivakasi are ideal for the growth of commercial real estate investment. Roadways are a major mode of transport in Sivakasi. This town houses four major road networks that connect Sivakasi with Srivilliputhur, Sattur, Virudhunagar and Vembakottai. Even the town is served by routine bus services which can be accessed from local suburbs and the town itself. 

As Sivakasi is an industrial town, the truck transport system is also robust here with around 450 trucks used for loading and unloading activities. In addition, Sivakasi is home to the Sivakasi railway station that links Tamil Nadu with Kerala via Sengottai and Rajapalayam. Express trains like Pothigai Express link Sivakasi with Chennai Egmore and Sengottai. Even several passenger trains also ply from here. 

  • Education and Utility Services

Sivakasi is a favourable investment site owing to its prominent utility services as well. The uninterrupted electric and water supply further aids in the development of industries. The town stands out in terms of proper drainage system, municipal health centres, government hospitals, education centres, markets etc. Such availability of amenities not only benefits the residents but also investors looking for laying out their commercial investment plan. 

Commercial Real Estate Investment Opportunities in Sivakasi

Besides knowing the reasons for making commercial real estate investments in Sivakasi, you must be aware of the following sites that are ideal for materialising your investment plan. 

  • Kullur Sandhai Reservoir

One of the most lucrative sites for commercial real estate investment in Sivakasi is Kullur Sandhar Reservoir. Considering the declaration from the tourism department to transform the place to a district excursion centre, Kullur Sandhai is going to witness immense development in the hospitality industry in the near future.

  • Ayyampatti

Ayyampatti is another locality suitable for commercial real estate investment. The economy of the place is highly influenced by cottage industry. Other major industries that work here are based on matchbox and agriculture manufacturing. 

  • Kanjampatti

You can also consider Kanjampatti for making a commercial real estate investment plan.  The economy of this place largely depends on agriculture. The presence of big reservoirs and extensive paddy lands aids the growth of agriculture-based industries. 

Things to Consider Before Purchasing a Commercial Property in Sivakasi

Here are the following factors that you must keep in mind while investing in commercial real estate in Sivakasi.

  • RERA Authentication

Check for RERA registration of the property before finalising it. Scrutinise registration details and legal status of the property.The Real Estate (Regulation and Development) Act was implemented in 2016 to ensure transparency in the real estate sector. The provisions of RERA have made it mandatory for the builders or promoters to reveal all project-related information and submit related documents in the RERA official portal. 

It will help investors get all details and tide over discrepancies. Also, ensure that the property is compliant with all the provisions and tax payments.

  • Real Estate Market Trends

The latest economic trends influence real estate investment. Hence you must have an idea regarding the market trends prevailing in the property’s location and consider factors like projected rate hikes, unemployment rates etc. Knowing recent sale prices, tenant rates, supply and demand of other commercial properties around and more will position you advantageously. 

  • Property Location and Available Amenities

Analyse the property location before investing in commercial real estate. The right location will not help your business flourish, but it will also help you reap the benefits of higher returns. Also, consider the availability of facilities and amenities around the location. This is another parameter that will bestow you with higher returns. Consider looking for retail facilities, sufficient car parking, advanced security systems, internet services etc. 

  • Builder’s Credibility

Besides assessing property location, you must also cross-check and assess the reputation of the builder related to the project you are interested in investing in. In this context, you can conduct an internet search to fetch details. You can also track the past records of the builder and go through the feedback and reviews of previous clients.

Stamp Duty in Sivakasi

Women receive rebates in stamp duty payments in most states. However, that is not the case in Tamil Nadu. Here, both men and women have to pay the same amount as stamp duty and registration charges. 

In order to complete the property transaction, you have to bear stamp duty payment as mentioned in the table. The stamp duty rate varies depending on the category of the documents. 

Type of DocumentStamp Duty Rate
Gift deed7% of the property’s market value
Sale deed/conveyance7% of the market worth
Exchange deed7% of the market value
Agreement to sale₹ 20
Mortgage with possession 4% on loan principal
Simple mortgage1% of the loan amount (which is subjected to the highest amount of ₹ 40,000)

Registration Charge in Sivakasi

To get an idea regarding the registration charges that you have to pay besides stamp duty, refer to the table.

Document CategoryRegistration Charges
Gift deed4% of the property’s market value.
Exchange deed4% of the market worth of the property
Sale deed/conveyance4% of the property’s market worth.
Agreement to sale1% on the advanced money (if more than 1% of the possession is given, then total amount is taken into consideration)
Simple mortgage1% on the loan principal (which is subjected to a maximum amount of ₹ 1, 00,000)
Mortgage with possession1% on the loan amount (subjected to a highest amount of ₹ 2,00,000

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

Besides understanding the prevailing market trends, you must also assess the future outlook of the property you are investing in. Owing to the increasing population and growing economy of the town, Sivakasi was developed from Sivakasi municipality to a second-grade municipality which was furthered to a first-grade municipality with time.

Following economic growth and revenue generation, the place was further upgraded to a special-grade municipality. Over the past decades and even in the coming days, the robust support from the State Government and the Central Government will keep Sivakasi as one of the high-developed towns. This will further attract numerous investors.

Sivakasi is one such place that is going to witness a boost in all the industrial sectors that will not only attract investment opportunities but will expand employment scopes. 

In the coming days, Sivakasi is going to shift to the green firecracker norms. Around ₹15 crores have been invested in the development of the CSIR-NEERI lab that aids the examination of emission level of the green firecrackers that will be manufactured from Sivakasi. CSIR-NEERI is developing certain additives that need to be combined with firecrackers. This will reduce dust pollution by at least 30 per cent and facilitate the growth of firecracker industries here.

As the industry is going under the green cracker zone, it will expand scope in the global arena as well.

Commercial Real Estate Vs Other Asset Classes

To know the particularities of commercial real estate and other asset classes, refer to the following section. 

  • Commercial Real Estate Vs Gold

Gold is a liquid asset and is ideal for both short-span and long-span investments. Commercial real estate, on the other hand, not only helps you earn higher returns but also comes with convenience in dealing with tenants. It will also help you enjoy a regular flow of income if invested for longer time duration.

  • Commercial Real Estate Vs Stocks and Mutual Fund

You can earn higher returns along with reaping the benefits of higher liquidity and diversification with mutual funds. However, to do so, you must have an understanding of the market and different clauses before investing in mutual funds. Though diversification acts as an advantage but it can dilute the profits earned from an investment. However, with commercial real estate, you can earn stable returns without undergoing high risks. 

  • Commercial Real Estate Vs Bonds

Bonds and commercial real estate are great passive income sources. Bonds providing fixed-income security help you gain stability in income status in the near future. On the other hand, commercial real estate investment allows you to earn higher returns and reap favourable tax advantages. Also with time, as the real estate value tends to increase, it helps you earn higher returns.

If you wish to opt for a low-risk investment option and earn a fixed return, invest in bonds. To do so, explore our website and register for the same.

  • Commercial Real Estate vs Residential Real Estate

Through commercial real estate investment, you can earn higher returns. It helps you reap the benefits of long-term leases and ease of dealing with tenants as compared to residential real estate investments. However, in case of residential real estate investment, you have chances of lower profitability potential. Moreover, tenant mismanagement can affect profits and cause damage to the property.

Go through the comparison table of different asset classes. (Comparison is made in terms of returns, volatility, ticket size, risks and liquidity)

Parameters Commercial Real Estate GoldStocks & Mutual Funds BondsResidential Real Estate 
ReturnsHighModerateHighModerateModerate
LiquidityLowHighHighModerateLow
VolatilityLowLowHighLowLow
RiskLowLowHighModerateLow
Ticket SizeHighLowVariesVariesHigh 

Steps to Invest in Commercial Real Estate in Sivakasi

Follow the step-by-step guide to invest in a commercial real estate property in Sivakasi.

Step 1: Firstly set a budget by analysing your finances.

Step 2: Then start with the property search. Opt for locations which will help you earn higher returns and have better future prospects.  

In this regard, you can reach out to a real estate agent as they have a better understanding of the market standards and the locality. 

Step 3: Shortlist some of the property sites that cater to your finances and business goals.

Step 4: After checking the RERA registration finalise a property. Also, keep necessary documents in order. 

Step 5: Initiate payments for stamp duty and registration charges. Also, clear the service charges if you seek help from a broker or a lawyer. 

Buy an Insurance plan and cover your newly-bought property from damages.

Final Word

Sivakasi has evolved to be a famous business centre in South India. The place is long familiar with offset printing, fireworks and safety matches industries; hence is widely regarded as the commercial centre of India. However, before investing in a commercial property in Sivakasi, you must have a comprehensive idea regarding the investment opportunities here. Moreover, having an idea regarding the property location, laws and other property-related rules and regulation is also essential.

Frequently Asked Questions

  1. Which airport is accessible from Sivakasi?

Ans. The nearest airport to Sivakasi is Madurai International Airport. It is located at a distance of 70 km. 

  1. What is the population of Sivakasi?

Ans. As per 2011 census, Sivakasi had a total population of 71,040; the sex ratio shows 1,009 females for every 1,000 males.

  1. What are the primary objectives behind implementing RERA in the real estate sector?

Ans. Here are the main objectives behind introducing RERA in real estate sector:

  • To bring transparency and accountability to the entire real estate sector.
  • To fast-track discrepancies
  • To pave way for expedited development and investment in the sector
  • To induct standardisation in norms and professionalism
  • To curb project delays etc.

Was this helpful?

Anshul Gupta

Co-Founder
IIT Roorkee Alumnus and CFA with experience of structuring debt products worth more than 15000Cr for institutional and retail investors.

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