For years, India’s coworking story has largely been written in metro skylines, from Bengaluru’s tech corridors to Gurugram’s glass towers. But that narrative is changing. A quiet shift is underway, and it is happening beyond the big cities.
According to Manas Mehrotra, Founder of 315Work Avenue, the demand for flexible workspaces is no longer confined to metros. Tier-2 and even Tier-3 cities are seeing a steady rise in interest, reshaping how and where India works.
“While major metro cities have been the key markets for coworking spaces, there’s a growing demand in tier-2 and tier-3 cities too, making the market more diverse,” Mehrotra notes.
The reasons are practical. Companies are under constant pressure to optimise costs. Rentals, employee salaries, and operational expenses in metros have steadily climbed. In comparison, Tier-2 cities offer lower real estate costs and a better cost of living. For businesses looking to expand without inflating overheads, these cities present an attractive option.
But cost is only part of the story.
There has also been a noticeable shift in workforce preferences. Many professionals who moved to metros for opportunities are now choosing to return to their hometowns or smaller cities, especially after experiencing remote and hybrid work during the pandemic years. Reverse migration is no longer just a temporary trend. It has become part of a broader rebalancing of work and life.
Flexible workspace providers are stepping into this gap. Organisations want to be closer to employees while still offering structured office environments. Coworking spaces in Tier-2 cities allow companies to set up satellite offices without committing to long-term leases or heavy capital expenditure. It is a model that aligns with today’s cautious but growth-oriented business mindset.
Government-backed infrastructure projects are further strengthening the case. Improved highways, better connectivity, expanding airports, and stronger digital infrastructure are gradually narrowing the gap between metros and smaller cities. As Mehrotra points out, these infrastructural pushes are setting the stage for a significant upswing in workplace demand across Tier-2 markets.
Another major driver is the expansion of Global Capability Centers, or GCCs. Traditionally concentrated in metro hubs, GCCs are now exploring Tier-2 cities for new operations. The appeal is clear: lower operating costs, access to a wider and often untapped talent pool, and improving digital ecosystems. As GCCs establish a presence, they create demand not only for office space but also for allied real estate investments. This, in turn, fuels the coworking segment.
The market itself is also evolving. Mehrotra expects consolidation within the coworking sector, where larger operators may acquire smaller players to expand their footprint. As demand spreads geographically, scale will become a key advantage. Established brands with operational experience and capital strength are better positioned to enter emerging markets and standardise service quality.
The expansion into Tier-2 cities signals more than just geographic growth. It reflects a structural shift in India’s workplace culture. Work is becoming more distributed. Companies are prioritising flexibility. Employees are seeking balance without compromising on opportunity.
For coworking firms, the next chapter of growth may not be written in India’s tallest towers, but in its fast-growing regional centres. As businesses rethink location strategies and talent becomes more mobile, Tier-2 cities are moving from the sidelines to the centre of India’s flexible workspace story.
