Kerala’s Ascent: The Pulse of India’s Progress

Kerala, accounting for 2.8% of India’s population and 1.2% of its land area, substantially contributes over 4% to the country’s GDP. The state’s per capita income, 1.5 times the national average, further underscores its economic performance.

Beyond its prominent tourism sector, the state is emerging as a key economic centre in South India, particularly in the IT, healthcare, and education domains. This expansion is contributing towards diversifying its economic base, generating new employment opportunities, and creating a favourable investment climate.

Kochi: At the Forefront of Kerala’s Economy

Kochi, Kerala's commercial and industrial capital, plays a significant role in the state's real estate sector, driven by its strategic coastal location, robust connectivity, and expanding infrastructure. The city has the highest per capita income in Kerala and is home to Infopark, a prominent IT hub, and major retail developments, including Lulu Mall and Forum Mall. The city’s total office space stock grew by ~28% in the last three years and stood at 17 million sq. ft. as of December 2024.

Other Key Emerging Markets

·       Thiruvananthapuram: A strong education and research foundation drives the capital city's development as it rapidly evolves into a significant urban centre. Thiruvananthapuram'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.

·       Thrissur: Thrissur’s central location within Kerala, robust connectivity with other key urban centres, cultural vibrancy, and educational prominence makes it an attractive destination for tourists, working professionals, and students.

·       Kozhikode: Kozhikode's strategic advantages — coastal Malabar Coast location, proximity to Kochi and Bengaluru, and robust transportation — position it as a growing investment destination. The development of IT parks and trade centres are driving employment opportunities in the city.

Actionable Strategies to Capitalise on Kerala's Economic Opportunities

·       Relaxing FSI and other development control norms

·       Recognising IT/ITeS as essential service

·       Formulating GCC-specific incentives

·       Developing dedicated policies targeted at incentivising sectors such as DCs, fintech, semiconductors, etc.

·       Expanding specialised universities and technical institutes with curricula focused on AI, cybersecurity, and fintech

·       Implementing policies targeted at incentivising private commercial real estate developers

·       Prioritising attracting large flexible workspace operators to Kerala

·       Facilitating additional government investment and private participation to boost Kerala’s tourism sector

·       Prioritising transportation and digital infrastructure development

·       Marketing the advantages and opportunities of smaller urban centres in the state

·       Facilitating the development of residential developments near offices to attract and retain skilled workforce

·       Further encouraging sustainable construction practices and green technology adoption through fiscal and non-fiscal incentives

To gain further insights into our analysis of Kerala's promising economic growth trajectory and evolving real estate landscape, please click on the download button.