According to CBRE report, retailers have moved to these smaller communities as a result of corporations setting up sizable operations there to attract workers who would otherwise have to leave their hometowns.
In the past year, stores for brands including Wooden Street, Birkenstock, Biba, Uniqlo, Tim Hortons, and Tasva by Aditya Birla Fashion have opened in tier 2 cities, and many more have expansion plans.
In the upcoming years, Chandigarh, Jaipur, Ahmedabad, Kochi, Thiruvananthapuram, Lucknow, Indore, Bhubaneshwar, Vishakhapatnam, and Coimbatore will experience fresh growth in India in terms of office space leasing as well as retail consumption.
The majority of Tier II cities have established high streets, but recently malls have been launched in these towns by developers including Phoenix, Nexus, K Raheja Corp, and Lulu.
Additionally, malls, industrial hubs, and flexible space operators are becoming more prevalent in most cities. The report claims that the relatively lower cost of living in these cities when compared to tier-I cities, as well as the growing number of healthcare facilities and educational institutions, all contribute to the high quality of life in these cities.
In recent years, several initiatives to create a presence in these areas have been made by domestic and international businesses, which has increased investor interest.
The research claims that because talent was no longer restricted by regional boundaries, it provided global and domestic corporates with a plethora of opportunities.
Many corporates are entering these tier-II cities now that they are searching for their personnel to return to work in order to be close to the talent. While tier-I cities will likely continue to be the top choice for office occupiers in the medium to long term, CBRE anticipates an increase in the take-up of office space in tier-II cities as well.
As of H1 2022, Chandigarh, Kochi, Thiruvananthapuram, and Ahmedabad have a comparatively higher stock, whilst Jaipur, Coimbatore, and Indore have experienced a comparatively bigger uptick in activity over the previous six months, both in terms of development completions and space take-up.
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