Tier-II cities will continue to play a vital role in the country’s growth story as per a report by CBRE. The report analyses retail and office real estate development in 10 key cities: Chandigarh, Jaipur, Ahmedabad, Kochi, Thiruvananthapuram, Lucknow, Indore, Bhubaneshwar, Visakhapatnam, and Coimbatore.
According to the report, these cities will be the new growth vectors in India in the coming years based on the parameters of real estate landscape, work environment, quality of life, and sustainability.
The various business clusters across tier-II cities offer a mix of non-SEZ and SEZ establishments with average quoted rentals starting from Rs 30-40 sq. ft. a month to INR 60-80 sq. ft. a month.
The majority of Tier II cities have established high streets, but recently malls have been launched in these towns by developers including Phoenix, Nexus, K Raheja Corp, and Lulu. In the past year, brands including Wooden Street, Birkenstock, Biba, Uniqlo, Tim Hortons, and Tasva by Aditya Birla Fashion have opened their stores in tier-II cities. Many other brands too are exploring expansion to these cities.
According to the report, the quality of life in these cities is well supported by the relatively affordable cost of living compared to tier-I cities, along with an increasing presence of healthcare facilities and educational institutions. There is also rising investor interest over recent years, with various plans announced by domestic and global firms to establish their footprint in these markets.
“The growing urban sprawl is likely to spread beyond tier-I cities so that tier-II cities take on the mantle of the future. Recognizing this need, the government started undertaking measures to plug in the prevailing infrastructure/business gaps that would boost the development of these cities,” he added.
