GCCs Drive Real Estate Growth in Tier 2 and 3 Cities
The rise of Global Capability Centers (GCCs) and IT parks in Tier 2 and 3 cities is boosting both residential and commercial real estate demand, creating a ripple effect in the market.
Real EstateGccsTier 2 CitiesTier 3 CitiesIt ParksReal EstateSep 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 offshore units of global companies that provide specialized services and support to their parent organizations. They are often set up in countries with lower operational costs and a skilled workforce.
How are GCCs impacting real estate in Tier 2 and 3 cities?
GCCs are driving demand for both residential and commercial real estate in Tier 2 and 3 cities by creating jobs and generating economic activity. This has led to increased investment in these regions.
Which cities are seeing the most growth due to GCCs?
Cities like Coimbatore, Kochi, Thiruvananthapuram, Mysuru, and Visakhapatnam in South India are seeing significant growth due to the presence of GCCs. These cities offer cost advantages and a skilled workforce.
What are the benefits of setting up GCCs in Tier 2 and 3 cities?
The benefits include lower operational costs, improved connectivity, a large skilled talent pool, and better chances of retaining talent. These factors make Tier 2 and 3 cities attractive for setting up GCCs.
What policies are supporting the growth of GCCs in India?
The Karnataka government's 'Beyond Bengaluru' initiative aims to establish 500 new GCCs between 2024 and 2029. Similarly, other states like Telangana and Andhra Pradesh are providing incentives to attract GCCs.
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