South Indian States Poised for High-Growth in Technology and GCCs: CBRE-CII Report
Southern states of India are poised for high growth in technology and scaling of global capability centres (GCCs), including advanced manufacturing in electric vehicles, electronics, and aerospace, according to the latest report titled 'Shaping The Future: The Real Estate Vision 2030 For Karnataka And Beyond' by CBRE South Asia and CII.
The report highlights the dynamic economic landscape across the five southern states of Tamil Nadu, Karnataka, Telangana, and Kerala. This is evidenced by robust growth spanning a diverse spectrum of industries, notably IT/ITeS, tourism, and critical manufacturing sectors such as automotive and electronics. The collective strength of this region is firmly established upon a diversified economic base, a world-class talent pool, infrastructure, and proactive government policies.
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, the report stated.
In terms of sectoral momentum, IT/ITeS continues to be the dominant driver across all three cities, accounting for a significant share of office leasing. Life sciences is gaining prominence, particularly in Hyderabad and Bengaluru, backed by the presence of global R&D centres and innovation parks. Electronics manufacturing is anchored in Chennai, supported by robust exports and supply chain infrastructure. Rising interest in data centres, premium residential developments, and warehousing is shaping the next wave of real estate growth across both metro and tier-II locations.
Next Wave of Opportunities in Southern States As They Aim for USD 1 Trillion Economies
As India sets its sights on becoming a USD 30-trillion economy by 2047, the Southern states will be an indispensable driving force behind this ambition. There is ample growth opportunity among these states across sectors, and it can be tapped into through targeted measures.
Karnataka: Objective- USD 1 trillion economy by 2032
• Fostering New Economic & Employment Hubs Beyond Bengaluru: Implement development plans for tier-II and tier-III cities, targeting investments in infrastructure (roads, rail, airports, digital connectivity), social amenities (housing, healthcare, education), and industrial/tech parks
• Enhancing research and development: Strengthening the financial outlay of the state's R&D ecosystem through public-private partnership and though collaboration with premier educational institutions
• Accelerating manufacturing: Clear district-wise vision for focus sectors such as automobile, pharmaceuticals, machinery through integration of technologies
• Boosting tourism and hospitality: Focus on coastal and eco-tourism by building infrastructure and incentivising start-ups in the sector
Tamil Nadu: Objective- USD 1 trillion economy by 2030
• Pioneering Industrial leadership: Leveraging its existing leadership, the state should promote smart manufacturing across key sectors including electric vehicles, semiconductor manufacturing, and niche electronics
• Developing industrial townships: Development of industrial townships, including industrial parks and housing facilities for workers; developing port-led industrial corridors for seamless logistics
• Data centres (DC): Tamil Nadu's strategic location, dependable power supply, and extensive land availability collectively position it as a prime destination for significant data centre development, attracting leading operators.
Fostering a sustainable talent ecosystem: Enhancing industry-linked higher education, reskilling through short-term certifications
Telangana: Objective- USD 1 trillion economy by 2036
• Bolstering regional connectivity: Prioritising advancements in transportation and digital infrastructure to facilitate seamless movement and communication
• Driving growth in biotechnology sector: Life sciences- Pharma villages along the Hyderabad-Nagpur and Hyderabad-Bangalore highways; the sector contributes nearly 3% to the state's GSDP, double the nation average
• Boosting aerospace and defence sector: Developing aerospace and defence research institutions fostering skill development and cutting-edge technologies
• Implementing smart urban planning: Integrating smart city initiatives to optimise resource management and efficiency
Kerala: Objective- USD 1 trillion economy by 2047
• Enhancing Kerala IT Policy, 2023: Relaxing FSI and development norms for IT parks, designate IT/ITeS as an essential service and implement a subsidy program for GCCs
• Developing sector-specific policies: The government should consider strategically developing and implementing dedicated policies targeted at incentivising sectors such as data centres, fintech, and semiconductors, among others
• Boosting tourism: Leveraging Kerala's established tourism infrastructure, additional government investment and private participation could amplify the sector's overall economic impact
"Southern India is not only mirroring the region's economic strength, it is architecting the future of India's real estate landscape. The convergence of high-quality infrastructure, proactive governance, and a deep talent pool has turned cities like Bengaluru, Hyderabad, and Chennai into global investment attractions. What is equally compelling is the rise of Tier-II cities where targeted development and policy support are unlocking new opportunities across asset classes. This dual-track growth makes the South a blueprint for sustainable, inclusive, and innovation-led urban development," said Ram Chandnani, Managing Director – Leasing, CBRE India.
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