As per CBRE South Asia Pvt. Ltd and CREDAI Kerala joint report, Kochi's commercial real estate market is booming, with the office and retail sectors expanding significantly in recent years. The city's office space stock has increased by around ~28 per cent in the last three years, reaching 17 million square feet by December 2024. The retail sector is also growing rapidly, at a CAGR of ~9 per cent since 2020, with total retail space already at 3.4 million square feet.
In 2024, technology firms were reported as the largest players in the office leasing market, accounting for 44 per cent of the total space. Research, consulting, and analytics firms followed with around 25 per cent of the leasing activity, alongside other industries, including space operators at 12 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 added that domestic companies were the primary contributors to office leasing, accounting for 57 per cent of the total activity. After domestic, American-origin companies accounted for 29 per cent, EMEA firms for 11 per cent, and APAC companies for 3 per cent. Furthermore, smaller-sized transactions (less than 50,000 sq. ft) accounted for 78 per cent of the total leasing in Kochi.
According to the report, the key factor driving Kochi's office real estate growth is the Kochi Infopark Special Economic Zone (SEZ) development, positioning the city as an attractive, cost-effective destination for Indian and global technology companies. The state government's initiatives and the city's strong technological and infrastructural foundation further support Kochi's increasing appeal.
Kochi's retail sector is thriving, with the city benefiting from a growing consumer base and increasing disposable income. The city's organised retail industry includes multiple large malls with domestic and international brands. As of December 2024, Kochi's retail stock stood at 3.4 million square feet, reflecting a notable growth of ~42 per cent since 2020. The retail leasing in the city in 2024 was primarily driven by the fashion and apparel segment, accounting for a 55 per cent share in total retail leasing, followed by homeware and department stores, contributing 27 per cent, while hypermarkets constituted 8 per cent. The luxury segment and health and personal care held 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.
By the end of 2024, Kochi's residential unit stock exceeded 17,000, driven by its status as a major port city and commercial hub. The influx of IT professionals, shipping, and trade industries has spurred demand for housing. Kochi's robust infrastructure, including highways, a metro system, and an international airport, supports the growth of its residential real estate. Initially, development focused on the Central Zone, with areas like Panampilly Nagar and Kadavanthra seeing organised projects. The premium segment, especially waterfront developments at Marine Drive, grew, attracting leading developers. Over time, growth spread to the East and North Zones, such as Tripunithura, Kakkanad, and Edappally, which became key commercial hubs, with the East Zone now dominating organised residential developments driven by IT hubs like InfoPark.
Pinarayi Vijayan, Honourable Chief Minister of Kerala, highlighted the state government's commitment and said, "The Kerala government is ready to implement the changes in building regulations. We are committed to 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."
