Tier 2 Real Estate Largely Being Driven By Start-Ups

By : 360 Realtors

18 January, 2023

The tier 2 cities in India are developing rapidly in terms of infrastructure, and this is largely driven by start-ups. Currently, India has got 108 unicorns. The boom in the commercial real estate market implies that start-ups will occupy a significant part of office space in the next few years. The absorption trends are already high in the large metro cities. Besides, the tier 2 cities have also witnessed a rapid growth in the real estate market. With urbanization, these cities are attracting developers, entrepreneurs, investors, and businesses. The government has also come up with several measures to foster the growth of real estate in the cities.

By 2025, over 37% of the population in India is likely to love in urban centres. By 2035, this figure is likely to reach 43%. Also, urbanization is likely to spread beyond the tier 1 and 2 cities. The government has recognized this importance and undertaken several infrastructure projects. This would bridge the infrastructure gap and foster better development in these cities.

Considering the challenges in the tier 2 cities, several entrepreneurs have come forward to address them. They also find good business opportunities in these cities to tap into. According to the Ministry of Trade and Industry, around half the recognized start-ups come from the tier 2 and 3 cities in India.

Naturally, the tier 2 cities have emerged as a potential growth vector. The progress that they have made in the real estate environment is phenomenal. Particularly, they have focused on sustainable growth, quality of lifestyle, and operating environment. The growth was slow till the pandemic, after which business activities boomed. Local investors currently are now more confident and they can acquire talent easily. This explains why start-ups are coming up in the tier 2 cities to spearhead the continual growth in their infrastructure.