India Tier 2 Cities Gain Ground in Office Demand

India’s office market is beginning to spread beyond its traditional metropolitan core, with Tier-2 cities gaining attention from companies seeking skilled workers, lower operating costs and greater geographic flexibility. Ahmedabad, Jaipur, Kochi, Coimbatore, Mysuru and other emerging centres are increasingly being considered for GCCs and distributed operations, potentially changing how commercial growth is planned across India.

India’s largest cities still account for most office activity. However, recent market research points to a gradual broadening of corporate location strategies. JLL estimates that Tier-2 locations can provide meaningful cost advantages, while CBRE expects occupiers to selectively expand into smaller cities as they pursue new markets and longer-term scalability. The attraction is not limited to cheaper offices. Companies are assessing access to universities, specialised skills and lower employee costs. Cities such as Ahmedabad, Coimbatore, Jaipur and Kochi are developing stronger technology and services ecosystems, giving businesses alternatives to increasingly competitive metropolitan labour markets. Global Capability Centres are an important part of this shift.

JLL says more than 90% of GCC activity remains concentrated in Tier-I cities, but emerging locations are increasingly being used alongside established hubs. This multi-city model can spread operational risk while allowing companies to tap different talent markets. Flexible offices are also lowering the entry barrier. Colliers expects operators to expand across cities including Ahmedabad, Bhubaneswar, Chandigarh, Coimbatore, Indore, Jaipur, Kochi and Lucknow. Its research indicates that average seat rentals in these markets can be 30–35% below Tier-I levels. For cities, however, office-led expansion brings responsibilities beyond commercial real estate. More workplaces mean greater pressure on roads, public transport, water, housing and energy systems. Without coordinated planning, lower property costs could simply shift congestion and infrastructure stress to new locations.

RERA will also matter where new commercial projects fall within the law’s registration requirements. The Ministry of Housing and Urban Affairs confirms that RERA covers both residential and commercial real estate, with applicable projects required to be registered before marketing or sale. Pure office leasing, however, should not automatically be treated as a RERA transaction. The opportunity for Tier-2 cities therefore depends on more than attracting office buildings. Reliable public transport, efficient utilities, climate-resilient infrastructure, quality commercial stock and accessible housing will determine whether new employment centres produce durable urban growth. India’s metros are likely to remain dominant, but a more distributed office network could make the next phase of commercial expansion geographically broader and more balanced.

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India Tier 2 Cities Gain Ground in Office Demand