Tamil Nadu will need 1.2 bn sq ft of office space, 20 mn residential units: Report

Tamil Nadu's urban surge: Tamil Nadu is on the cusp of a major shift by FY 2047-48, witnessing a substantial rise in urbanisation and economic activities. The state is expected to need 1.2 billion sq ft of office space, 20 million residential units, and 225,727.7 hectares of industrial land, according to a report by Knight Frank and CREDAI. This underscores a focused push towards tier 2 and 3 cities, driving intense economic growth and urban development.

As the state gears up for increased urbanisation, the demand for housing and office spaces is set to skyrocket. Formal employment is projected to reach 19 million, necessitating 1.2 billion sq ft of office space. The report underscores the requirement for 20 million urban homes to accommodate the growing population by 2047.

Tamil Nadu targets $2.6 trillion GSDP

Notably, Tamil Nadu aims to see a rise in its Nominal Gross State Domestic Product (GSDP), targeting around $ 2.6 trillion by FY 2047-48. However, meeting these targets comes with a substantial price tag – essential investments totalling $ 111 billion are needed to drive the state's economic engine.

Tamil Nadu, positioned as the second-largest state economy in India, has been a consistent contributor, accounting for 8.8 per cent of the nation's GDP. Despite the challenges posed by the COVID-19 pandemic, the state's GDP is estimated to have reached $294 billion in FY 2023. Notably, Tamil Nadu experienced growth, averaging 11 per cent annually in the ten years leading up to the pandemic.

Sectors driving TN

The services sector takes centre stage, contributing 53 per cent to Tamil Nadu's economic growth. Manufacturing, constituting 19 per cent of the state's economy, is set to expand to $ 374 billion by FY 2048, necessitating 225,727.7 hectares of industrial land. The construction sector, currently estimated at $32 billion, is poised to skyrocket to $208 billion by FY 2047-48.

Shishir Baijal, Chairperson and MD of Knight Frank India, emphasises the need for strategic investments in industrialisation and urbanisation. The report suggests an additional capital injection of USD 111 billion from FY 2025-48 to facilitate the envisioned economic growth across sectors, including real estate.

Infrastructure & housing development

The report provides advisories on infrastructure enhancement, including regular debottlenecking of ports and airports, stormwater infrastructure improvement, and smart urban planning. It also stresses the need for the state to provide housing facilities for workers, playing a crucial role in attracting and retaining a skilled workforce.

Tamil Nadu also aims to boost tourism. The report suggests influencer marketing, infrastructure improvement, ease of doing business initiatives, and strategic hotel development to attract approximately 4.96 million tourists by 2047.