T.N. government must create land banks to boost commercial real estate: experts

Published 30 July 2026 · local

While cities in Tamil Nadu are witnessing robust demand for commercial real estate, high land costs are constraining the supply of commercial spaces. To address

While cities in Tamil Nadu are witnessing robust demand for commercial real estate, high land costs are constraining the supply of commercial spaces. To address this and sustain the momentum, the State government needs to create large land banks, speakers at the Real Estate and Urban Infrastructure Summit 2026, organised by The Hindu and held at ITC Grand Chola in the city on Thursday (July 30, 2026), said. Discussing the topic, ‘The New Growth Triangle: Manufacturing, GCCs and Real Estate’, the speakers, however, pointed out that while there is no single solution to the land supply issue, Gujarat’s land pooling model and land leasing mechanisms could help overcome high land costs that dictate the supply of land for commercial real estate development. Arun Prasad, Principal Architect, Arun & Associates, Coimbatore, said the State should follow the example of Gujarat, which has made land pooling a success.

Mr. Prasad said that by pooling 1,000 to 2,000 acres of land from various landowners, Global Capability Centres (GCCs) have been created. The land pooling model has been a success because landowners retain ownership of their land even as development takes place, creating value for their property. Julian Pradeep Francis, Associate Director, RMZ, wanted the State government to create large land parcels and give them on long-term lease to developers for commercial infrastructure development, which would pave the way for the city’s development. Mr. Pradeep said sustainable development has been ingrained in RMZ, which develops commercial real estate, and that it is slowly being adopted in the residential sector as well. He said that, with regard to GCCs, Pune and Gurgaon have already crossed the 100 million sq.

ft. mark, while Chennai has slowed down. Kanchana Krishnan, Commercial Head of ANAROCK, pointed out that the country has become a value creator as it has moved from business process outsourcing (BPO) centres to research and development (R&D) hubs. While Hyderabad and Bengaluru are doing well in terms of GCCs, Chennai continues to witness good supply in certain pockets. She said all the city’s extended areas are bound to witness significant commercial space development. M. Sabareeswaran, Senior Vice President, Leasing Business Development, Casagrand Commercial, said integrated construction development, encompassing theme parks, malls and hotels, has been happening in China, and this needs to be replicated in all the cities of the State, including Tiruchi and Madurai. Sabareeswaran pointed out that Thoothukudi is emerging as a promising destination for the hospitality sector.