A handful of metro cities, including Greater Mumbai, Delhi-NCR, and Bengaluru, have long dominated India’s office real estate growth story. But this is slowly changing now with overcrowded and congested metro markets, improved connectivity and infrastructure and a gradual realisation of better quality of life in smaller cities.
Coimbatore, Ahmedabad, Jaipur, Indore and Surat now appear regularly in the expansion plans of multinationals, capability centres and workspace operators. The shift is both gradual and uneven, and yet the trend is now distinctly visible in data. India has more than 1,900 global capability centres (GCCs) now, employing over 2.1 million professionals, according to ANSR. While the bulk of this activity remains concentrated in the major cities, more than 220 GCC units are already present in emerging cities.
The percolation of GCCs is just one signal demonstrating a growing interest in Indian and international businesses to open offices in India’s Tier-II and Tier-III cities. A primary factor is improved access to a new talent pool that is local to these cities and is wary of migrating to a conventional metro.
Coimbatore has more than 75 GCCs today and could host nearly 200 by 2032, according to an EY-CII report, drawing on a technology workforce of more than 30,000 STEM graduates a year. Bosch has more than 5,000 employees in Coimbatore, while Kraft Heinz operates a GCC of more than 600 professionals in Ahmedabad.
Allianz Services has over 1,500 employees in Thiruvananthapuram. Surat's trading and business economy, and the services and enterprise ecosystems developing in Jaipur and Indore, give newer office demand a similar foundation to build on.
For employers, the proposition goes beyond lower operating costs. India's non-metro regions account for a significant share of the country's graduate talent, while cities with established industrial, technology or services ecosystems offer companies an existing base from which to build. shorter commutes and the ability to stay closer to home also count for professionals.
These examples point to a broader change: smaller cities are no longer being considered only as lower-cost alternatives. For some businesses, they are becoming part of a wider talent and operating strategy, with leadership and large-scale functions retained in Bengaluru or Mumbai and specialised teams built in Coimbatore, Ahmedabad or another emerging market.
A bigger role for flexible workspace
Flexible workspace has been gaining ground across the country. Colliers India recorded 8.6 million sq ft of coworking leasing in the first half of 2026, a 32% increase year-on-year. The largest volumes still come from the major cities, but supply is spreading into emerging markets as well.
Additionally, Vestian estimates that Tier-II cities now have around 9 million sq ft of flexible workspace across more than 575 centres. Ahmedabad, Kochi and Indore are among the more established markets, while a wider set of cities is beginning to attract operators.
That demand is now reflected in operator pipelines, as well. International Workplace Group (IWG), the parent of Regus and Spaces, signed 43 new centres in India in the first half of 2026, making the country its third-largest growth market worldwide and its fastest-growing in Asia. Alongside the major metros, the signings include Tiruppur, Ujjain, Mohali, Malappuram, Ludhiana and Gandhinagar.
"We are experiencing rapid growth right across our network in India. We now have 125 locations across 37 cities, with more than 200 additional locations in our pipeline. Importantly, our growth is increasingly extending into a much wider range of cities, including Jaipur, Surat and Coimbatore, as demand for high-quality professional workspace continues to grow beyond the major metros," said Harsh Lambah, Country Head, IWG.
The more significant shift is in what occupiers expect from these spaces. As larger companies and GCCs move into emerging cities, demand is increasingly centred on professional, well-connected and enterprise-ready workplaces rather than simply affordable office space.
A GCC looking to set up in Indore expects the same standards it has in Bengaluru: Grade A specifications, reliable power and digital infrastructure, security, and a location that clients and senior leadership can reach easily. However, existing real estate stock has not caught up. Vestian found that only 26% of flex centres in Tier-2 cities sit in Grade A buildings, while GCCs have placed more than half of theirs in Grade A assets. The way companies take space is changing too.
"Companies are moving to capital-light solutions, shifting from long, fixed leases to flexible agreements. They also want access to a network of locations, with the ability to scale up and down as needed. Enterprises, GCCs and growing businesses alike are rethinking how much space they need and where their teams are based, which is fuelling demand for this kind of flexibility," Lambah said.
Turning buildings into workplaces
For landlords in smaller cities, the model offers a way to improve utilisation of existing commercial assets. Converting a building into managed workspace brings it up to the enterprise-ready standard occupiers are asking for, while giving the owner access to a growing occupier base.
"We take the same approach to our own growth, expanding through managed partnerships with local property owners. This lets us open quickly and tailor each centre to what businesses in that city need, whether that's a large enterprise floor or a compact office for a team just setting up," Lambah added.
With Vestian putting the cost advantage of Tier-2 flex space at up to 50% against the metros, the occupier case is strong. In markets where institutional office supply is thin, the model also gives local owners a route into the enterprise segment without taking on operating risk. Over time, that helps close the quality gap.
Policy is laying the tracks
Connectivity remains central to whether a city can support sustained corporate activity. In the Union Budget 2026-27, the government raised public capital expenditure to ₹12.2 lakh crore and said it would keep focusing on infrastructure in cities with more than five lakh residents, which it described as growth centres. The Budget's most direct instrument is the City Economic Region. Each designated region is to receive ₹5,000 crore over five years, allocated through a challenge mode with reform-linked, results-based financing, aimed at Tier-2 and Tier-3 cities and selected temple towns.
States are working at a more local level. Karnataka's GCC policy offers a "Beyond Bengaluru" package, including rental reimbursements, for GCCs that are set up in cities such as Mysuru, Mangaluru and Hubballi-Dharwad-Belagavi. Gujarat's GCC Policy 2025-30 aims to attract at least 250 new GCC units and more than 50,000 jobs. For businesses, the impact is straightforward: better roads, airports, rail networks and freight links make it easier to connect smaller-city operations with customers, suppliers and larger corporate hubs.
A more distributed map
India's metros are not losing their importance. The Nasscom-Zinnov report found that two-thirds of new GCCs in the past two years still chose Tier-1 cities, and Bengaluru, Hyderabad, Mumbai and Delhi-NCR will stay central to India's corporate real estate story. What they are gaining is a wider network of cities around them.
The pace will differ from one market to another. Talent depth, connectivity, sectoral ecosystems, the quality of commercial buildings and the presence of anchor employers will continue to shape where demand develops. But the direction is increasingly visible. In many cases, India's next workplace hubs are emerging in cities that have long had the talent, enterprise and economic activity, and are only now gaining the infrastructure, workspace and corporate demand needed to bring those strengths together.
