Bengaluru, Chennai, and Hyderabad lead real estate growth in India, driven by tech and investor demand: Report
The report titled Shaping The Future: The Real Estate Vision 2030 for Karnataka and Beyond, released at the CII Karnataka Real Estate Conference 2025, highlighted the evolving landscape across Tamil Nadu, Karnataka, Telangana, Andhra Pradesh, and Kerala.
"The report positions Bengaluru, Chennai, and Hyderabad as the leading cities driving Southern India's real estate momentum, each offering unique sectoral strengths and long-term growth potential. These cities are underpinned by world-class infrastructure, strong occupier demand, and expanding institutional investment," it said.
Also Read: Bengaluru sees 81% drop in luxury housing sales: CBRE
Karnataka, Tamil Nadu, and Telangana lead the way
The report points out that each state in the region is charting an ambitious path toward contributing to India's projected $30 trillion economy by 2047. Karnataka, for example, has set a target of becoming a $1 trillion economy by 2032 and is focused on building new economic hubs beyond Bengaluru, strengthening R&D, and accelerating manufacturing.
Tamil Nadu is prioritising smart industrial corridors, EV and semiconductor production, and data centre growth. Telangana is sharpening its focus on biotech, aerospace, and regional connectivity, while Kerala is leveraging IT reforms and tourism to chart its long-term growth strategy.
Tushar Giri Nath, additional chief secretary, Urban Development Department, Karnataka, stressed the need for balanced growth. 'As Karnataka continues to urbanise rapidly, we must ensure that our development is inclusive and well-planned. Strengthening physical and social infrastructure will be key as we scale Tier 2 and Tier 3 cities as new growth engines,' he said.
Cities are driving growth, but Tier-II potential is rising
The report said that Bengaluru, Hyderabad, and Chennai continue to be the flag-bearers of Southern India's real estate momentum, with strong office demand, increasing interest in premium residential developments, and growing investments in data centres and warehousing.
However, the report also highlighted the untapped potential in Tier-II cities such as Mysuru, Coimbatore, Visakhapatnam, and Kochi, where rising infrastructure investment and state policy support are unlocking new opportunities.
'The convergence of strong infrastructure, governance, and talent has made southern metros magnets for global capital. What's equally compelling is the rise of Tier-II cities where policy and planning are now enabling cross-sectoral real estate expansion," Ram Chandnani, managing director of Leasing, CBRE India, said.
Also Read: Beyond the metros: Why are Tier II cities emerging as the new commercial real estate hotspots?
Sectoral growth anchors new opportunities
The report said that the IT/ITeS sector continues to dominate office leasing across major southern cities, driven by robust demand from domestic and global occupiers. In parallel, life sciences and biotech are gaining traction, particularly in Hyderabad and Bengaluru, supported by the presence of global R&D hubs and innovation parks. Chennai is emerging as a focal point for electronics and electric vehicle manufacturing, thanks to its strong industrial ecosystem and export-oriented infrastructure. Meanwhile, sectors such as tourism, hospitality, and retail are also expanding steadily, fuelled by rising urban affluence and improved physical connectivity.
Gaurav Kumar, managing director, Capital Markets and Land, CBRE India, noted, 'Southern India is diversifying rapidly across real estate asset classes—from Grade A offices to advanced manufacturing and data centres. Both foreign and domestic capital are fuelling this evolution, supported by bold state-level reforms.'
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