Kerala's 'grounded' real estate: How to make it take off

When discussing the future of Kerala’s real estate landscape, certain key factors must be acknowledged up front. 

While the state may not be well-suited for large-scale manufacturing, it presents significant potential for service-sector companies. 

High-value manufacturing and light engineering sectors hold promise. Taurus’ Thiruvananthapuram project has already attracted substantial interest from major corporations, leading to a surge in professional migration.

The upcoming Vizhinjam port offers another significant opportunity. 

It is poised to attract global players seeking assembly and high-value manufacturing facilities outside China. 

Once the infrastructure for motherships to dock and depart is ready at Vizhinjam port, it will become a logistics hub. 
As it grows into a port for shipping finished products for major international companies, numerous companies will set shop here, and with them, professionals too. 

This influx of businesses and professionals could potentially stimulate growth in office and residential spaces.

Modern high-value manufacturing facilities are increasingly incorporating housing, shopping, and recreational amenities. 

This trend, exemplified by Foxconn's Apple manufacturing facility in India, suggests that future growth lies in infrastructure development projects that seamlessly integrate workspaces with modern living amenities.

Kerala's youth is migrating abroad in large numbers for work and higher studies.  

Simultaneously, many Malayalees who have spent years overseas may be considering returning home. 

This presents a unique opportunity for the development of high-quality senior living and assisted living facilities.

Given the state's potential, it is not surprising that such facilities will emerge in towns across Kerala.

Why are real estate prices stagnating?

One intriguing aspect of Kerala's real estate market is the relatively stagnant prices. 

This can be attributed to several factors, including a predominance of residential projects, limited office space availability, and a lower density of shopping spaces compared to other regions.

High land prices and restrictive floor area ratios further hinder large-scale construction projects.

This observation does not discount the presence of shopping malls in Thiruvananthapuram, Kochi, and Kozhikode; rather, the density of shopping spaces in Kerala is less, compared to that of other countries.

For example, the number of shopping centres in Toronto, Canada, far exceeds those that exist across Kerala.

Need for urban design planning  

To address these challenges and drive sustainable development, Kerala requires a comprehensive urban plan that encompasses the entire state as a single entity, an urban continuum.

This plan must prioritise sustainability, resilience, and effective responses to unexpected events. 

Sustainability, in this context, refers to construction methods that protect and do not weaken the environment. 

We must also prepare for possible natural disasters in the future. That’s why we need to stress the need for resilience.

Unfortunately, the state's current policies and regulations often lack coherence and integration.

There are many rules—coastal regulations, wetland protection laws, building codes, etc.—but they are not integrated. 

Urban planning has evolved into urban design planning worldwide.

While Kerala still relies on outdated micro-rules and lengthy bureaucratic processes, countries like Singapore and the Netherlands offer valuable lessons in urban planning and development. 

Role models for Kerala  

Taurus has invested in 8-9 countries across four continents. Not everything works out perfectly everywhere, but some practices in certain places can be emulated by Kerala.

Among them, Singapore is one country that can inspire Kerala in urban planning and development projects.

Singapore’s climate and population is comparable to Kerala. Transshipment is Singapore's main focus.

Singapore developed its plans by focusing on its strengths and implemented them with precision, which is the reason behind that country's development.

From Europe, Kerala can draw inspiration from the Netherlands—a country that lies below mean sea level and frequently experiences sea surges.

Yet, the Netherlands advanced in development due to precise planning.

Kerala’s potential is in knowledge-based industries, and we can make progress through skill development.

A state cannot progress by trying to lead in all sectors. 

Instead, Kerala should try to lead in sectors that suit it. High-value manufacturing and light engineering are achievable for Kerala, but not automobile sector. 

Similarly, in office space Thiruvananthapuram and Kochi cannot compete with Bengaluru and Hyderabad. 

The gap between those cities and Kerala's towns is huge. However, it is possible to perform well among tier-two cities. 

Through strategic planning, infrastructure development, and a focus on sustainability, Kerala can position itself as a thriving real estate market, attracting both domestic and international investors.

About the author

Ajay Prasad is the Managing Director and CEO of Taurus Investment Holdings, India, a leading global private equity real estate firm. With a strong background in international real estate and infrastructure development, he is spearheading the Taurus Downtown Trivandrum project in Thiruvananthapuram.
After completing his engineering degree from the College of Engineering, Trivandrum, and an MBA from IIM Kolkata, Prasad earned a master's degree in real estate development from the Massachusetts Institute of Technology. His extensive experience spans over two decades, encompassing feasibility studies, acquisitions, planning, financing, and execution of various real estate projects.
In addition to his role at Taurus Investment Holdings, Prasad serves as the CEO of Taurus Sage Advisers, an investment platform launched by Taurus India.