Kochi’s commercial real estate sector is witnessing a significant surge, led by rapid office space expansion and an evolving retail landscape, according to a joint report by CBRE South Asia Pvt. Ltd and CREDAI Kerala, the city’s total office space stock, grew by 28% over the past three years, reaching 17 million sq. ft. by December 2024. Meanwhile, retail space has expanded at a compounded annual growth rate (CAGR) of 9% since 2020, now standing at 3.4 million sq. ft.

Office Leasing Momentum in Kochi

Kochi’s office leasing activity was primarily driven by technology firms, which accounted for 44% of total space take-up in 2024. Other key contributors included research, consulting, and analytics (RCA) firms at 25%, flexible workspace operators at 12%, aviation at 11%, banking, finance, and insurance (BFSI) at 4%, and engineering and manufacturing (E&M) at 3%.

The report also highlights that domestic companies dominate leasing activity, contributing 57% of total office space absorption, followed by American-origin firms at 29%, EMEA firms at 11%, and APAC companies at 3%. Small-sized transactions, typically under 50,000 sq. ft., comprised 78% of total space absorption, indicating a preference for flexible and scalable workspaces.

Kochi’s emergence as a commercial hub is fueled by government-backed initiatives promoting the city as an affordable alternative for Indian and global tech firms. “Kochi’s commercial real estate and residential sector is witnessing sustained momentum, driven by the presence of technology firms. As we move forward, continued investments in office spaces and the expansion of Global Capability Centres (GCCs) will further strengthen Kochi’s position as a key commercial hub in South India,” said Anshuman Magazine, Chairman & CEO, India, Southeast Asia, Middle East & Africa, CBRE.

Retail Sector Growth and Changing Consumer Preferences

Kochi’s retail sector has evolved rapidly, supported by rising disposable incomes and an expanding consumer base. The city has seen a 42% increase in organised retail space since 2020, with malls and high-street shopping districts driving growth. In 2024, retail leasing was primarily led by the fashion and apparel segment, which accounted for 55% of total space absorption, followed by homeware and department stores (27%), hypermarkets (8%), luxury brands (3%), and health and personal care (2%).

“The city’s retail landscape is transforming significantly, fueled by rising consumer demand and urbanisation. Looking ahead, strategic developments in connectivity, sustainability, and smart urban planning will be crucial in shaping Kochi’s next growth phase,” said Ram Chandnani, Managing Director of advisory & Transaction Services CBRE India.

Sustainable Growth and Future Outlook

Sustainability is becoming a key focus in Kochi’s commercial real estate sector. Government policies and infrastructure development create a favourable environment for businesses seeking cost-effective, eco-friendly office spaces. Pinarayi Vijayan, Chief Minister of Kerala, emphasised the state’s commitment to sustainable urban development, stating, “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.”

As demand for commercial real estate rises, Kochi is positioning itself as a major IT and business hub, attracting investments in office and retail spaces. With strong leasing momentum and a growing emphasis on sustainability, the city is set to remain a dynamic force in India’s commercial real estate landscape.