Commercial real estate in Kochi records robust growth, driven by office and retail demand

Kochi, February 08th, 2025: CBRE South Asia Pvt. Ltd, India’s leading real estate consulting firm, and CREDAI Kerala, today released a joint report titled, ‘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’s findings, Kochi boasts a vibrant commercial real estate market, with the office and retail sectors demonstrating a notable upward trend over the past few years. The city’s total office space stock grew by ~28% in the last three years and stood at 17 mn. sq. ft as of December 2024; the total retail space stock in Kochi grew at a CAGR of ~9% since 2020 and stood at 3.4 mn. sq. ft as of December 2024.

Kochi’s office sector

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

The report further indicates that domestic companies were the leading contributors to office space leasing in 2024, accounting for 57% of the overall leasing activity, followed by American-origin companies at 29%, EMEA firms at 11%, and APAC companies at 3%. Additionally, small-sized transactions (less than 50,000 sq. ft) dominated the office absorption, accounting for 78% 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. Notwithstanding competition from other established centres in South India, Kochi is progressively solidifying its position as a future IT hub. Kochi Infopark Special Economic Zone (SEZ), Supportive government policies, transforming infrastructure, and a growing pool of skilled professionals underpin the city’s attractiveness to IT firms.

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 mn. sq. ft., reflecting a notable growth of ~42% 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% share in total retail leasing. This was followed by homeware and department stores, contributing 27%, while hypermarkets constituted an 8% share. The luxury segment and health and personal care held a 3% and 2% 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.

Pinarayi Vijayan, Chief Minister of Kerala, 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). Instead of traditional expansion, we should explore vertical habitats, like vertical gardens, to accommodate the growing population.”

Anshuman Magazine, Chairman & CEO, India, Southeast Asia, Middle East & Africa, CBRE, said, “Kochi’s commercial real estate and residential sector is witnessing sustained momentum, driven by the presence of technology firms. 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.”

Ram Chandnani, Managing Director, Advisory & Transaction Services, CBRE India, said, “Kochi’s retail landscape is undergoing a significant transformation, fuelled by rising consumer demand and increasing urbanization. Looking ahead, strategic developments in connectivity, sustainability, and smart urban planning will be crucial in shaping Kochi’s next growth phase.”

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