“South India’s real estate market closed 2025 with an estimated ₹20,000 crore in residential sales value, marking a decisive recovery from the pandemic phase and signalling a deeper structural shift toward emerging Tier-2 and Tier-3 cities,” said Mr. M.R. Jaishankar, Chairman & Managing Director, Brigade Group, while addressing a keynote speech at CREDAI SouthCon 2026, the South India Knowledge Conclave held in Bengaluru.
According to Mr. Jaishankar, South India still trails the all-India market in absolute scale due to the presence of much larger Tier-2 cities in the North and West, including Ahmedabad, Lucknow, Indore and Kanpur. In contrast, South India’s Tier-2 powerhouses, notably Coimbatore, Kochi, Trivandrum and the rapidly advancing Visakhapatnam (Vizag) are now emerging as the primary growth engines for the region.
South India’s commercial real estate has surpassed 2025 projections with modest absorption: 2-4 Million Square Feet (office), 4-8 Million Square Feet (retail/mall), 8-12 Million Square Feet (warehousing), 5,000-8,000 hotel rooms and 10-30 MW data-centre capacity.
Giving a forecast for the year 2030, he mentioned that a stronger growth is predicted, 8-12 Million Square Feet (office), 15-20 Million Square Feet (retail), 40–60 Million Square Feet (warehousing), 12,000-18,000 hotel rooms and 200-300 MW (data centres).
By 2035, ambitions escalate further: 15-20 Million Square Feet (office), 30-40 Million Square Feet (retail), 90-120 Million Square Feet (warehousing), 25,000-35,000 hotel rooms and 600-900 MW (data centres), though linear projections often falter against real-world economics.
Tier-2/3 Momentum Extending into the Next Decade
Research shared during the conclave projects that by 2030, Tier-2 and Tier-3 South Indian cities could collectively deliver 40,000 residential units, scaling up to 60,000 units by 2035, translating into a compounded growth trajectory of 10–12% over the period. Developers expect 100% growth in Tier-2 sales volumes over the next five years, contingent on macro stability.
Infrastructure is Rewiring Demand Geography Mr. Jaishankar attributed the sales value surge to India’s aggressive infrastructure rollout spanning Bharat Mala, Vande Bharat, national corridor expansions and the Udaan airport network, which grew from under 10 airports to 65+ and is projected to reach 170 airports in the coming years.
The improved logistics, mobility and airport density are advancing demand beyond Bengaluru, Chennai and Hyderabad, enabling residential, retail, warehousing and hospitality assets to scale in previously under-served cities.
Beyond Residential: Warehousing, Hospitality and Data Centers Break Out
While residential contributed the bulk of the 2025 sales value, the conclave highlighted that warehousing, hospitality and data center assets are now expanding faster than office and retail in South India: Warehousing is benefiting from lower land costs in Tier-2 belts Hospitality has seen record occupancy & ARR since 2022 due to domestic leisure travel Data center capacity is shifting toward coastal cities, with Vizag emerging as a contender following large multinational intent, including a $15 billion investment announcement by Google
Cycles, Risks and Caution Against Over-Leveraging Mr. Jaishankar reminded delegates that multiple economic cycles from the 1991 liquidity crisis to COVID-19 have repeatedly reshaped India’s real estate market, cautioning developers against over-leveraged land banking and untested expansion strategies.
He stressed that while India remains relatively insulated compared to global markets, geopolitical shocks, AI-driven employment restructuring in IT hubs and tightening cycles could affect absorption in 2026-2028.
Brand, Trust and Mixed-Use as Competitive Moats
The conclave discussion highlighted that brand strength, transparency, RERA-aligned governance and mixed-use planning are now outperforming stand-alone development models, especially in slow cycles. Developers with stronger brands and better compliance continue to transact even in down markets.
To honor the tireless labour of construction workers, the event commenced with a symbolic lamp-lighting ceremony performed by three construction workers.
CREDAI Sees Strong Housing Demand and Improved Delivery Momentum Amid Policy Push
A press briefing by respective CREDAI State Presidents, Mr. Bhaskar T Nagendrappa (CREDAI Karnataka), Mr. K Indrasena Reddy (CREDAI Telangana), Mr. Bayana Srinivas Rao (CREDAI Andhra Pradesh), Mr. Roy Peter (CREDAI Kerala) and W S Habib (CREDAI Tamil Nadu) was held. They said that while demand for apartments continues to rise post-COVID, affordability is deteriorating because the long-standing ₹45-lakh cap no longer matches today’s construction and land costs.
Mr. Bhaskar T Nagendrappa, President, CREDAI Karnataka, said, “South India’s real estate sector is entering a decisive decade. With technology transforming demand, Tier-II cities accelerating and stakeholders demanding greater transparency, trust is no longer optional—it is the basis for growth. CREDAI Karnataka is committed to building an ecosystem where policy, innovation and responsible development come together to shape a more vibrant and equitable urban future for our region and for the country.”
They noted that developers have urged the government to revise this definition, expand unit size limits, reduce GST and stamp duty and make affordable housing viable through faster approvals and PPP-based land support. Although they insisted delivery delays are largely a thing of the past due to regulatory reforms, they also admitted that permissions, E-khata processes and power connections continue to face bureaucratic bottlenecks that push up finance costs and slow handovers. CREDAI acknowledged that Karnataka has not seen a single viable private affordable housing project under the current framework and said this reflects a need for policy overhaul rather than lack of developer commitment. On labour, they maintained that workers are being better supported and paid, but argued that the government’s underuse of labour-cess funds and the growing scarcity of skilled workers are pushing the industry toward greater mechanisation.
On a positive note, CREDAI said that regulatory reforms, stronger buyer confidence and ongoing urban migration are expanding the housing market and creating momentum for more timely project delivery, with developers expressing willingness to collaborate with government on policy improvements and PPP models to revive the affordable housing segment.
SouthCon 2026 is a 2-day event representing itself as a southern knowledge forum rather than a routine real-estate gathering, framing the event around the theme ‘Trust Through Transparency-Readying for the Growth of the Next Decade.’ Over 450 delegates representing real estate developers from across multiple states participated in SouthCon 2026.
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