Driven by Office and Retail Demand, Kochi Commercial Real Estate Records Robust Growth

Ram Chandnani, CBRE India (second from right), unveiling the ‘Kerala’s Ascent: The Pulse of India’s Progress’ report along with CREDAI Kerala officials

Kochi, February 6, 2025: Kochi boasts a vibrant commercial real estate market, with the office and retail sectors demonstrating a notable upward trend over the past few years, says real estate consulting firm CBRE South Asia Pvt. Ltd in a joint report with CREDAI Kerala, ‘Kerala’s Ascent: The Pulse of India’s Progress’, at the CREDAI Kerala Statecon 2025. The report comprehensively analyses Kerala’s dynamic real estate landscape, highlighting Kochi’s growing prominence as a promising destination.

According to the report, Kochi’s total office space stock grew by ~28 per cent in the last three years and stood at 17 msf as of December 2024; the total retail space stock in Kochi grew at a CAGR of ~9 per cent since 2020 and stood at 3.4 msf as of December 2024. This is a testament to the city’s strengthening footprint in the commercial real estate space, reiterating its upward momentum.

Kochi’s Office Sector

Calendar year 2024 saw technology firms lead the city’s office leasing activity with a 44 per cent share in the overall space take-up. In addition to technology firms, research, consulting and analytics (RCA) firms accounted for ~25 per cent of the leasing share in Kochi’s office market, followed by flex space operators at 12 per cent, the aviation sector at 11 per cent, banking, finance and insurance (BFSI) companies at 4 per cent, engineering and manufacturing (E&M) at 3 per cent, and other sectors contributing 1 per cent.

The report further indicates that domestic companies were the leading contributors to office space leasing in 2024, accounting for 57 per cent of the overall leasing activity, followed by American-origin companies at 29 per cent, EMEA firms at 11 per cent, and APAC companies at 3 per cent. Additionally, small-sized transactions (less than 50,000 sq. ft) dominated the office absorption, accounting for 78 per cent of total space take-up in CY 2024.

The report highlighted key factors to Kochi’s office real estate growth story and highlighted the state government-led initiatives positioning the city as a cost-effective destination for Indian & global technology companies. The report points out the establishment of the Kochi Infopark Special Economic Zone (SEZ), which further strengthened Kochi’s position as a growing office market. Notwithstanding competition from other established centres in South India, Kochi is progressively solidifying its position as a future IT hub. Supportive government policies, transforming infrastructure, and a growing pool of skilled professionals underpin the city’s attractiveness to IT firms. With a strategic commitment to sustainable development and technological innovation, Kochi is well-positioned to become a prominent player in the Indian IT landscape.

Kochi’s Evolving Retail Landscape

Kochi’s retail landscape is supported by a growing consumer base with high disposable incomes, fuelling demand for premium products and lifestyle services. The city’s organised retail sector features several large-format malls offering a diverse selection of domestic and international brands.

As of December 2024, Kochi’s retail stock stood at 3.4 msf., reflecting a notable growth of ~42 per cent since 2020. The retail leasing in the city in CY 2024 was primarily driven by the fashion and apparel segment, which accounted for a 55 per cent share in total retail leasing. This was followed by homeware and department stores, contributing 27 per cent, while hypermarkets constituted an 8 per cent share. The luxury segment and health and personal care held a 3 per cent and 2 per cent share, respectively. This diverse retail composition highlights the evolving consumer preferences and the city’s expanding retail landscape.

Kochi’s Residential Growth Story

Total residential unit stock in Kochi stood at over 17,000 units by the end of 2024, driven by its status as a key port city and commercial hub. As a major port city and the commercial nucleus of Kerala, Kochi attracts a significant influx of professionals employed in the IT, shipping, and trade industries, thereby generating substantial demand for residential properties. Moreover, the city’s robust social infrastructure and comprehensive transportation network, comprising highways, a metro system, and an international airport, play a crucial role in maintaining the vitality of its residential real estate sector.

Residential development in Kochi initially took root in the Central Zone, with organised projects emerging in areas such as Panampilly Nagar and Kadavanthra. The premium and luxury segment, particularly waterfront developments, gained prominence at Marine Drive. Over time, leading developers entered this market with high-end projects, leveraging the strategic advantages of the location. This growth gradually extended to the East and North Zones, including Tripunithura, Kakkanad, and Edappally, which have since evolved into key commercial hubs. Currently, the majority of organised residential developments are concentrated in the East Zone, fuelled by the presence of IT / ITeS hubs, including the InfoPark.

Kerala Chief Minister Pinarayi Vijayan said, “The Kerala government is ready to implement the changes in building regulations. We are committed in ensuring that development remains sustainable. It is essential to consider the carbon footprint, its impact on future generations, and ways to mitigate such effects. We expect the construction sector to contribute to the Nava Kerala Nirmanam (New Kerala Development). The state is undergoing unparalleled development, achieved through collective efforts. Instead of traditional expansion, we should explore vertical habitats, like vertical gardens, to accommodate the growing population.”

Chairman & CEO, India, Southeast Asia, Middle East & Africa, CBRE, Anshuman Magazine said, “Kochi’s commercial real estate and residential sector is witnessing sustained momentum, driven by the presence of technology firms. The city’s evolving business ecosystem, supported by robust infrastructure and a growing pool of skilled talent, makes it an attractive destination for both domestic and international enterprises.

As we move forward, continued investments in office spaces and the expansion of Global Capability Centres (GCCs) will further strengthen Kochi’s position as a key commercial hub in South India.”

Managing Director, Advisory & Transaction Services, CBRE India, Ram Chandnani said, “Kochi’s retail landscape is undergoing a significant transformation, fuelled by rising consumer demand and increasing urbanization. The expansion of organized retail, led by premium malls and global brand entries, highlights the city’s evolving market dynamics. Simultaneously, the residential sector is benefiting from infrastructure growth and the city’s appeal to professionals across various industries. Looking ahead, strategic developments in connectivity, sustainability, and smart urban planning will be crucial in shaping Kochi’s next growth phase.”

Other Emerging Cities in Kerala

Thiruvananthapuram, the capital of Kerala, is rapidly evolving into a significant urban centre, driven by a confluence of key factors. The city’s IT sector is expanding, spearheaded by Technopark, one of India’s largest IT parks, attracting a large pool of skilled professionals and fostering a vibrant tech ecosystem. Technopark houses numerous IT companies, driving innovation and contributing significantly to the city’s economic growth.

A strong foundation of education and research drives Thiruvananthapuram’s development. Renowned educational institutions cultivate a highly skilled workforce, while prestigious research centres, such as the Vikram Sarabhai Space Centre, drive innovation. The city’s rich cultural heritage, combined with its picturesque beaches and prominent religious and historical landmarks, contribute significantly to a thriving tourism industry.

Ongoing infrastructure development projects, including road improvements and public transportation expansion, are enhancing connectivity, improving the quality of life for residents, and attracting further investment.

Thrissur’s central location within Kerala presents various advantages — the city benefits from robust connectivity via road, rail, and air networks, providing convenient access to major urban centres such as Kochi,

Thiruvananthapuram, and Kozhikode. The presence of National Highway 544, which traverses Thrissur, further enhances its accessibility. The city’s rich cultural heritage, exemplified by events such as the Thrissur Pooram, adds a distinctive dimension to its appeal. This cultural vibrancy and its educational prominence make the city an attractive destination for tourists, working professionals, and students.

Kozhikode’s strategic advantages, including its coastal location on the Malabar Coast, proximity to key cities such as Kochi and Bengaluru, and robust transportation network, position it as a growing investment destination. Its well-developed healthcare infrastructure, established educational institutions, and ongoing infrastructure enhancements, such as road extensions, flyovers, and the planned metro system, contribute to its
growth potential.

The development of IT parks and trade centres is a key driver of job creation, reinforcing Kozhikode’s attractiveness for both residents and investors.