India’s office market is entering a new phase of decentralised growth, with Tier-2 cities steadily emerging as strong contenders for business expansion. Rising pressure on infrastructure and real estate in metro cities is pushing companies to explore more efficient and scalable alternatives.
According to a recent report by a real estate consultancy, flex spaces in Tier-2 cities have expanded significantly, reaching 575+ centres and 8.8 Mn sq ft. These markets now account for nearly 29% of total flex centres and over 9% of the country’s overall flex stock.
This growth is being driven by cost advantages and evolving business needs. Flex workspaces in non-metro cities offer cost savings of up to 50% compared to metros. This has attracted sectors such as IT-ITeS, Consulting, BFSI, and Engineering & Manufacturing. So far, 200+ companies have set up 300+ Global Capability Centre (GCC) bases across key Tier-2 locations.
While GCCs are not the primary demand driver, their presence is growing. Around 9% of flex centres in these cities support GCC operations, and 16% of GCC bases operate from flexible workspaces. This reflects a clear shift towards flexible, scalable office models.
However, quality remains an area of focus. Only 60% of flex centres in Tier-2 cities are located in dedicated office buildings, and just 26% are in Grade-A assets. In contrast, GCC-led centres show a preference for higher standards, with over 53% based in Grade-A buildings and 19% in green-certified spaces. This highlights a rising demand for sustainable and enterprise-grade infrastructure.
Shrinivas Rao, FRICS, CEO, Vestian, said: “The rise of Tier-2 cities is a defining shift in India’s expansion strategy. As infrastructure improves and flex ecosystems mature, the decentralization of GCCs will become a cornerstone of the Viksit Bharat 2047 vision.”
Going forward, improved infrastructure, better digital connectivity, and supportive policies are expected to accelerate growth in these markets. With increasing corporate confidence, Tier-2 cities are set to witness higher demand for Grade-A and sustainable office spaces, along with deeper adoption of flexible workspaces. This shift will play a key role in building a more balanced and resilient urban economy.
Also read: Viksit Workforce for a Viksit Bharat
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