With rising saturation in major metros, real estate developers and consultants are increasingly optimistic about the role of Global Capability Centres (GCCs) in driving demand for residential and commercial properties in India’s Tier 2 and 3 cities. The expansion of GCCs is reshaping these smaller urban markets and spurring significant real estate growth.
GCCs Spur Real Estate Demand Outside Metros
As multinational corporations set up or expand GCC operations beyond traditional IT hubs like Bengaluru, Mumbai, and Delhi, cities like Jaipur, Indore, and Coimbatore are emerging as prime destinations due to their competitive pricing and talent pools. Real estate demand in these tiers is accelerating, with developers forecasting 15-20% annual growth in residential segments in South Indian cities such as Coimbatore, Kochi, and Visakhapatnam.
Lower Costs and Better Talent Retention
Relative to metros, property prices and leasing costs in Tier 2 and 3 cities are 20-40% lower, making them attractive for businesses seeking cost-effective operations. These cities also benefit from lower employee attrition rates, as professionals prefer to work closer to home, leading to improved talent retention.
Infrastructure and Connectivity Improvements
Enhanced connectivity, availability of Grade A office spaces, and government initiatives such as the “Beyond Bengaluru” program contribute to making smaller cities more attractive for GCC setups. Improvements in transport infrastructure, SEZ benefits, and smart city projects support sustainable business growth.
Developer and Consultant Perspectives
Industry experts highlight that the rise of GCCs has created demand for tens of thousands of crores in real estate investments. Developers are actively purchasing land and launching projects to capture growing corporate migration to emerging hubs. This trend is not limited to South India, with cities across the country witnessing similar growth driven by GCCs.
Policy Support and Future Outlook
Government backing through targeted policies facilitates infrastructure development and incentivises GCCs in less saturated markets. For example, Karnataka aims to establish 500 new GCCs by 2029. States like Telangana and Andhra Pradesh anticipate significant office space absorption due to GCC growth, which will further fuel demand for commercial and residential real estate.
The FlexInsights Take
The migration of GCCs to Tier 2 and 3 cities represents a strategic shift that could democratize India’s economic growth beyond its megacities. For real estate stakeholders, this opens new market opportunities with strong growth potential, underpinned by cost efficiency, government support, and ready talent. However, success hinges on continued infrastructure upgrades and skill development to sustain this promising expansion.
