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Re-orienting real estate - Recent tidings in the South Indian region - EY - India

Re-orienting real estate

Recent tidings in the South Indian region

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Real estate, earlier an unorganized, family-driven practice, was slowly and steadily driven to becoming more organized.

Economic development in South India


Over the last two decades, Tamil Nadu, Andhra Pradesh, Karnataka and Kerala have shown accelerated economic development.

This development has stemmed from outstanding performance in skill-based manufacturing industries such as automotive and sectors such as biotechnology and IT-ITeS. This has led to fast-paced urbanization with the southern region housing 102.8 million people in urban areas (27.3% of India’s total urban population).

The pace of development can be gauged from the fact that in 1990, merely seven cities in the four states had a million-plus population. By 2015, this number is likely to touch 14.

Drivers for growth of southern markets

Tamil Nadu, Andhra Pradesh, Karnataka and Kerala broadly constitute 21% of the Indian population and contributed 25.4% of the national domestic product (NDP) in 2011-12 (a marginal increase from 24.9% in 2005-06). These states have gradually become robust centers for the service industry, while maintaining a strong focus on the manufacturing sector for industries such as automobiles, textiles, pharmaceuticals, defense and aerospace. The four states house close to 50% of the total number of SEZs in the country. Together with industrial growth, IT remains the dominant driver for the real estate market, followed by biotechnology.

Major Trends

Four pillars of the real estate business

Real estate, earlier an unorganized, family-driven practice, was slowly and steadily driven to becoming more organized. Today, the industry is increasingly adopting professional practices that have traditionally been characteristic of the service industry. This transformation, however, is bringing in operational hurdles for the industry.

This collection of white papers adopts a macro approach to look at some of these challenges through what we believe are “the four pillars of a real estate business:”


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