Southern States Poised for High-Growth Driven by GCCs & Advanced Manufacturing: CBRE-CII Report

Bangalore, July 31, 2025: CBRE South Asia Pvt. Ltd., India’s leading real estate consulting firm, and Confederation of Indian Industry (CII), today launched a joint report titled, ‘Shaping The Future: The Real Estate Vision 2030 For Karnataka And Beyond’. The report highlights opportunities in the southern states for high growth in technology and scaling (Global Capability Centers) GCCs, including advanced manufacturing in electric vehicles, electronics, and aerospace.

Sectors such as life sciences and tourism industries also present a vast potential in the southern states, it added. The report was released in the presence of Mr Tushar Giri Nath, IAS, Additional Chief Secretary to Government, Urban Development Department, Government of Karnataka. Mr Ashwinder R Singh, Core Member, CII Karnataka Real Estate Conference Chair, CII Real Estate NR & Vice Chairman, BCD Group, Mr Rabindra Srikantan Chairman, CII Karnataka State Council 2025-25 & Managing Director, ASM Technologies, Mr Gaurav Kumar, Managing Director, Capital Markets & Land, CBRE India and Dr Prashanth Reddy, Co-Chair, CII Karnataka Real Estate Conference & Managing Director, Fundermax.

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.

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 technologiesImplementing 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

Mr. Tushar Giri Nath, IAS, Additional Chief Secretary to Government, Urban Development Department, Government of Karnataka, in his keynote address, said, “As Karnataka continues to witness rapid urbanisation, it is imperative that our growth story remains inclusive and well-planned. We must not only expand physical infrastructure but also build robust social infrastructure to ensure that development is holistic and not isolated. A strong transportation grid, integrated urban planning, and well-aligned policy frameworks are critical as we move towards developing Tier 2 and 3 cities as the next growth engines. The government is committed to creating a policy environment that supports the real estate sector, and we encourage deeper engagement between the industry and authorities to drive collaborative, sustainable, and equitable urban development across Karnataka.”

Ram Chandnani, Managing Director – Leasing, CBRE India, said. “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”

Gaurav Kumar Managing Director, Capital Markets & Land CBRE India, said, “The Southern India region is diversifying across sectors, from Grade A office and data centres to high-value life sciences, advanced manufacturing, and warehousing. This shift is being driven by both global capital inflows and domestic occupier demand, reinforced by state-level reforms and infrastructure expansion. As India moves toward its USD 30 trillion economic ambition, Southern India will remain a critical lever delivering scale, resilience, and future-readiness across commercial and investment-grade real estate.”

Aman Choudhari, Past Chairman, CII Karnataka & Managing Director, Surin Automotive Pvt Ltd remarked, “CII remains committed to driving a future-ready real estate ecosystem through collaboration, innovation, and sustainability. As Karnataka leads the way in industrial growth and urban transformation, we must align infrastructure development with ESG principles to ensure inclusive and climate-resilient cities. This CII Karnataka Second Edition Real Estate Conference 2025 is a step forward in shaping that collective vision.”

“Karnataka is at the forefront of India’s real estate growth across residential, office, retail, and hospitality sectors. As we look toward 2030, innovation, sustainability, and integrated development will define our journey. This conference sets the platform for bold ideas, shared learnings, and collaborative action to shape a future-ready real estate ecosystem for Karnataka and beyond.”, said, Ashwinder R Singh, Core Member CII Karnataka Real Estate Conference Chair CII Real Estate NR & Vice Chairman BCD Group.

"The real estate opportunity in South India is immense and deeply interconnected. With cities like Bengaluru, Chennai, Hyderabad, Kochi, and Visakhapatnam driving innovation, we must now shift towards a regionally integrated approach rooted in sustainability, resilience, and inclusive growth. The 2nd Edition CII Real Estate Conference 2025 marks a critical step in unlocking South India’s urban potential by bringing together industry, policy, and design to build cities that are not only smarter and greener, but also more equitable and future-ready” said, Prashanth Reddy, Co-Chair CII Karnataka Real Estate Conference & Managing Director, Fundermax.