Tier-2 cities are set to emerge as real estate hotspots across India

According to a report by Colliers, India is projected to have nearly 100 cities with populations exceeding one million by 2050. The report highlights 17 high-impact emerging real estate hotspots, including Amritsar, Ayodhya, Jaipur, Kanpur, Lucknow, and Varanasi. Urban growth in these cities is expected to be driven by key factors such as infrastructure development, digitization, tourism, and transformations in the office landscape.

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As India marches towards becoming the third-largest economy in the world, emerging cities are poised to play a critical role in the nation’s growth trajectory. By 2050, India is projected to have nearly 100 cities with populations exceeding one million, in addition to its eight mega-cities, according to the “Equitable Growth and Emerging Real Estate Hotspots” report by Colliers. Key drivers such as infrastructure development, digitisation, tourism, and changes in the office landscape are set to spur urban growth across these locations.

The report highlights 17 high-impact emerging real estate hotspots across India. These include Amritsar, Ayodhya, Jaipur, Kanpur, Lucknow, and Varanasi in the North; Patna and Puri in the East; Dwarka, Nagpur, Shirdi, and Surat in the West; Coimbatore, Kochi, Tirupati, and Visakhapatnam in the South; and Indore in Central India. In these cities, the residential, warehousing, and retail sectors are identified as high-impact segments, with residential leading in 13 cities, warehousing in 10, and retail in 13.

The report also identifies other high-impact segments such as office spaces, hospitality, senior living, and data centers. Notably, offices are highlighted as the high-impact segment in only four cities, while hospitality is seen as critical in seven cities. Both senior living and data centers are considered high-impact in seven cities each. Smaller towns are emerging as dynamic contributors to India’s economy due to improved infrastructure, affordable real estate, skilled talent, and government initiatives.

“This growth is set to propel the real estate sector to an estimated $1 trillion by 2030 and potentially $5 trillion, representing a 14-16% share in GDP by 2050,” said Badal Yagnik, CEO of Colliers India. Enhanced connectivity and increased manufacturing activity driven by flagship infrastructure projects under the National Infrastructure Pipeline (NIP) and PM GatiShakti are expected to promote the dispersion and expansion of growth centers beyond tier-I cities. The development of factories and MSMEs is anticipated to drive the increasing warehousing requirements across emerging hotspots within infrastructure corridors.