Tamil Nadu's real estate growth is shifting beyond Chennai to Tier-2 cities fueled by airport connectivity and infrastructure spending.

Coimbatore: IT, electronics, and aerospace hub with Wipro, Cognizant, Infosys present. Saravanampatti and Peelamedu are IT hotspots; Kalapatti booming near airport. Prices ₹7,600/sq ft in Kalapatti, ₹8,895/sq ft in RS Puram. 2BHK rent ₹10,000–₹25,000/month.

Madurai: Expanding with IT parks, road upgrades, airport expansion. Madurai International Airport and four-lane highways connect to Chennai, Coimbatore, Trichy. Samayanallur and Perungudi emerging. Prices ₹6,501/sq ft. 2BHK rent ₹7,500–₹15,000/month.

Salem: Industrial hub with SAIL's Salem Steel Plant, JSW Steel, textile mills. Chennai-Salem, Chennai-Coimbatore, Bangalore-Chennai expressways boost logistics. Prices ₹6,270/sq ft. 2BHK rent ₹9,000–₹25,000/month.

Thoothukudi: Port city attracting investments from Cochin Shipyard Ltd, Indian Oil Corporation in EV manufacturing, green hydrogen, space-sector. Airport, sea-port, improving connectivity. Prices ₹4,807/sq ft. 2BHK rent ₹8,000–₹20,000/month.

Trichy: Fourth-largest city with BHEL, Ordnance Factory. Srirangam and Karumandapam seeing residential activity. Prices ₹5,756/sq ft. 2BHK rent ₹8,000–₹20,000/month.

Tamil Nadu acquired land worth ₹2,938 crore for ongoing airport projects at Chennai, Coimbatore, Madurai, Tiruchirappalli, Thoothukudi, with ₹350 crore for Salem's airport. Better air connectivity attracts businesses, tourists, investment, boosting housing and commercial demand near airports.

Concrete work 98% complete, structural steel erection 85% complete. Flooring, roof erection, and electrical work nearly complete. Glass panel installation for facade underway. Baggage systems and passenger facilities taking shape. Airports Authority of India targeting completion by January 2027 and inauguration by April 2027, subject to statutory approvals.

Chief Minister C Joseph Vijay wrote to Prime Minister Narendra Modi on August 5 requesting transfer of Chennai airport operations from Airports Authority of India (AAI) to a private operator. The letter cites falling performance: Chennai ranked sixth nationally in passenger traffic as of April 2026, overtaken by Kolkata. Terminal capacity is 27 million passengers annually, rising to 35 million post-expansion, but handled only 23.01 million in FY 2025-26, barely above pre-pandemic 22.54 million.

Operational complaints catalogued: difficulty accessing taxis and public transport outside terminal, unregulated taxi operations, insufficient parking, poorly maintained restrooms and seating, recurring air-conditioning failures, slow baggage delivery, long security and immigration queues, and repeated Phase II international terminal delays.

Cargo growth lagged: aircraft cargo movements rose 6% in May 2026 versus 14.5% at Bengaluru. Airside utilization: against declared peak capacity of 36 aircraft movements per hour, Chennai recorded 158,702 movements in FY 2026—average 435 daily (320 domestic, 115 international).

AAI director M Raja Kishore defended performance, noting privatization is a Government of India policy decision. He cited resolution of taxi/pickup complaints through new parking plaza and described passenger feedback as "100% satisfactory", saying staff are disappointed by isolated complaints overshadowing day-to-day achievements.

Both AIADMK and DMK governments resisted privatization for ~10 years; centre shelved similar plan in 2016.

Passengers demand urgent privatization of Chennai airport following a monkey entry incident at the international terminal. They cite delays in T3 Terminal inauguration (extended multiple times over seven years), lack of adequate food and retail options, and delays in opening the cab pick-up plaza (ready nine months before inauguration). Comparisons made to private airports in Bengaluru and Hyderabad. Cargo congestion is a major issue: the Air Cargo Agents Association of India (ACAAI) attributes it to acute shortage of terminal space relative to export demand and operational productivity bottlenecks. ACAAI calls for private sector participation in terminal expansion. AAI officials report T3 Terminal will be ready in seven months, cab plaza already open, and 19 acres acquired to address cargo congestion on GST Road. Officials say delays sometimes occur due to permission requirements from New Delhi headquarters. The Parandur airport project has been dropped; plans for alternative second airport site are in earliest stages.

Tamil Nadu government cancelled the ₹27,400 crore Parandur greenfield airport project due to environmental concerns and land acquisition opposition. The state has identified Manellore and Cheyyur as potential alternative sites and requested the Airports Authority of India to conduct technical feasibility studies.

The Parandur project had acquired 1,802 acres of land. The government is evaluating alternative uses for this land, including eco-friendly industrial projects. Property prices in Parandur have experienced volatility following the project's abandonment.

While new sites undergo evaluation, the state is expanding the existing Chennai International Airport, including development of Terminal 5 to handle rising passenger traffic. This expansion is intended to address immediate capacity constraints as Chennai serves as a major manufacturing and services hub. The state aims to reach a $1.5 trillion economy. Infrastructure delays could impact investor sentiment in logistics and aviation-linked sectors if connectivity does not improve alongside industrial expansion.