Kochi and Thiruvananthapuram in Kerala stand out with a cumulative 14 million sq. ft. office space, marking substantial potential in the state's real estate. A report, by CREDAI Kerala and Cushman & Wakefield, outlines the cities' advantageous features like robust infrastructure, income levels, and housing affordability. The state is positioned to attract corporate interest beyond primary markets due to policies, skilled diaspora, and improving infrastructure. While Kerala shows promise, limitations in land availability and high land conversion charges post as challenges, presenting the need for strategic solutions to foster sustained real estate growth.
The real estate scenario in Kerala is gearing up for remarkable growth, as per a report by CREDAI Kerala and Cushman & Wakefield. This promising surge is attributed to developers targeting tier-II markets like Kochi and Thiruvananthapuram for expansion, owing to their robust infrastructure, socio-economic dynamics, and availability of talent. The report underscores the significant potential showcased by these cities, particularly in terms of infrastructure, income levels, and housing affordability.
Kochi and Thiruvananthapuram collectively boast a substantial 14 million square feet of office space, the highest among tier-II cities, reflecting their emergence among the top 10 real estate markets. The report points out that Kerala is the only state with two cities in this distinguished list, demonstrating their promising scores across various parameters.
The state's infrastructure development, especially in air travel and metro expansion, combined with rising income levels and housing affordability, adds to the appeal for real estate growth. The Managing Director for Tamil Nadu and Kerala at Cushman & Wakefield India, VS Sridhar, anticipates a positive trend in Kerala's real estate, propelled by favourable government policies, a skilled talent pool, and improved infrastructure.
Kerala's establishment of IT/IT-SEZ and IT parks in major cities like Kochi, Thiruvananthapuram, and Thrissur has created a burgeoning ecosystem around commercial office market development, triggering swift growth. The report also highlights cities such as Kozhikode, Thrissur, and Palakkad for significant strides in real estate development, positioning Kerala as an appealing destination for office occupiers considering tier-II cities.
However, challenges exist. Urbanization rates in Kerala surpass the national average, leading to land constraints. Approximately 70% of the state is under forest cover or ecologically sensitive, limiting land availability for real estate. The Land Ceiling Act and high conversion fees for paddy land pose hurdles for significant projects, impacting their viability.
The report emphasizes the need for enhanced vertical development with a higher floor-space index, suggesting that a conducive infrastructure framework, including wider roads and increased utility provisions, could amplify this potential. Additionally, addressing high stamp duty and registration charges is proposed to reduce the cost of asset acquisition, making real estate more attractive for investors.
In conclusion, Kerala's real estate sector displays immense promise in tier-II cities. The region's strengths lie in its well-developed infrastructure network, attracting businesses and skilled individuals, while challenges like land scarcity, and high acquisition costs require strategic intervention for sustainable growth. The state's evolution as a preferred destination for businesses and individuals hinges on navigating these challenges and capitalizing on its strengths
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