GCCs Drive Real Estate Boom in Tier 2 and 3 Cities
The establishment of Global Capability Centers (GCCs) and IT parks in Tier 2 and 3 cities is fueling a significant growth in both residential and commercial real estate demand. Developers and consultancy firms are optimistic about the future, with over 200 GCCs already creating demand worth ₹30,000 crore in these regions.
Real EstateGccsTier 2 CitiesTier 3 CitiesCommercial DemandReal Estate NewsSep 07, 2025
Junaith Babu, COO of Chennai-based developer G Square, said: “We expect 15–20% annual growth in residential real estate demand across leading Tier 2 and 3 hubs in South India. The emergence of IT parks and GCCs has created a ripple effect, generating jobs that drive both residential and commercial real estate demand. Demand for plotted developments is particularly strong, often delivering 20–25% annual price appreciation in high-demand corridors like Coimbatore’s Saravanampatti and Trichy’s Panjapur.”
According to Peush Jain, MD, Commercial Leasing & Advisory, Anarock Group, over 200 GCCs have already created demand for more than ₹30,000 crore worth of commercial real estate. “Cities like Jaipur, Indore, and Coimbatore are emerging as attractive destinations since prices are 20–40% lower, while offering better chances of retaining talent,” he said.
Urvisha Jagasheth, assistant vice-president, research, Knight Frank India, added: “The entry of IT parks and GCCs has positioned Tier 2 and 3 cities as new growth engines for real estate. These locations are benefiting from improved connectivity, cost arbitrage, and a large skilled talent pool. Developers are actively acquiring land and launching projects to capture this wave of corporate migration.”
In South India, GCCs are heavily concentrated in Coimbatore, Kochi, Thiruvananthapuram, Mysuru, and Visakhapatnam, each hosting more than 20 centers. Coimbatore offers a 25–30% cost advantage compared to other cities, while Mysuru benefits from its proximity to Bengaluru. These cities also have ready Grade A office spaces, SEZ benefits, lower land costs, and strong infrastructure, including metro connectivity.
Policy support is also boosting the trend. Under its “Beyond Bengaluru” initiative, the Karnataka government has set a target of establishing 500 new GCCs between 2024 and 2029. Meanwhile, in Telangana and Andhra Pradesh, GCCs are expected to acquire 35–37 million sq ft of office space over the next three years, according to Knight Frank.
Frequently Asked Questions
What are Global Capability Centers (GCCs)?
Global Capability Centers (GCCs) are offshoring hubs where companies set up operations to leverage cost advantages and talent pools outside their primary locations. They are often used for IT, R&D, and other support functions.
How are GCCs impacting real estate in Tier 2 and 3 cities?
GCCs are driving significant growth in both residential and commercial real estate demand in Tier 2 and 3 cities by creating jobs and attracting investments. This has led to increased property prices and development activities.
Which cities are seeing the most growth due to GCCs?
Cities like Coimbatore, Jaipur, Indore, and Mysuru are seeing substantial growth due to the establishment of GCCs. These cities offer cost advantages and a skilled workforce, making them attractive for corporate expansion.
What are the key benefits of setting up GCCs in Tier 2 and 3 cities?
The key benefits include lower operational costs, access to a large skilled talent pool, improved connectivity, and strong infrastructure. Additionally, government policies and incentives are making these cities more attractive for GCCs.
What is the 'Beyond Bengaluru' initiative?
The 'Beyond Bengaluru' initiative is a government program in Karnataka aimed at establishing 500 new GCCs between 2024 and 2029. It seeks to diversify and decentralize the state's IT and real estate sectors, promoting growth in other cities.
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