Tier-2 cities overtake metros in land deals for first time, signalling real estate shift

New Delhi: Tier-2 cities have overtaken major metros in land transactions for the first time, signalling a potential shift in where India’s next wave of real estate supply will emerge, according to Cushman & Wakefield.

As per the data, Tier-2 markets accounted for 67% of land transacted in Q1 2026, compared with around 2% of annual transactions in 2021 and 34% in 2025. The shift comes amid tighter land availability and rising prices in major cities, prompting developers and investors to explore satellite towns and emerging urban centres where larger contiguous parcels remain available.

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Transactions increased from 16 acres in 2021 to 2,120 acres in 2025, with average deal sizes surpassing 40 acres in 2025 as opposed to about 18 acres in Tier-I markets.

Formats including townships, integrated complexes, and industrial parks are becoming more and more feasible outside of large cities due to the availability of larger parcels.

“As Sonipat transitions from an emerging corridor to a structured growth market, Jindal Realty is aligning its development strategy to this evolving landscape by focusing on integrated, future-ready communities. With a project strategically located in Sonipat, the company is leveraging the region’s improving connectivity, industrial expansion, and rising end-user demand to deliver thoughtfully planned residential offerings,” said Abhay Mishra, President & CEO, Jindal Realty.

The emphasis remains on quality infrastructure, sustainable design, and community-centric living - catering to both first-time homebuyers and long-term investors.

“Tier-2 and Tier-3 cities are increasingly attractive to real estate developers due to rising housing demand and investor interest. Improved infrastructure, like better roads and expanding metro networks, makes these areas more appealing. In Sonipat, demand for plotted developments is rising as buyers want larger, customizable living spaces. Its closeness to Delhi NCR and upcoming infrastructure projects strengthens its market position,” said Rohit Kishore, CEO, Hero Realty.

With ongoing upgrades and growing demand, Sonipat is set to become a key hub for custom-built homes, drawing interest from both investors and buyers.

“Tier-2 cities are fast becoming an integral part of India’s next real estate growth cycle, supported by improving infrastructure and expanding economic activity. Better connectivity through expressways, metro networks, airports and industrial corridors is opening up new residential catchments and making these markets increasingly attractive to both developers and homebuyers,” said Yashank Wason, Managing Director, Royal Green Realty.

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From a development standpoint, the availability of larger land parcels also enables us to plan integrated communities at scale.

"Sonipat's evolving infrastructure, coupled with its strategic location near Delhi, makes it a hotbed for investors looking for substantial returns on investment. The burgeoning demand for quality residential and commercial properties in Sonipat is fueled by a combination of affordability, spacious layouts, and a better quality of life compared to the crowded metropolitan areas. With the rise of remote working models is encouraging more people to move away from traditional city centers,” said Rahul Singla, Director of Mapsko Group.

Infrastructure is playing an important role in driving this shift. A significant share of transactions is concentrated around expressways, metro corridors, industrial corridors and airport-linked nodes.

West and South India together accounted for roughly 70% of transacted acreage, supported by public spending on transport and industrial infrastructure.

Visakhapatnam was among the notable contributors to the rise in Tier-2 activity in Q1 2026, with large land leases following the announcement of a cable landing station and subsequent interest from technology companies, including data-centre-related activity.

Cushman & Wakefield analysed 880-plus transactions involving 18,158 acres across 33 cities between 2021 and Q1 2026. The report estimates that these land parcels could support nearly 1.4 billion sq ft of future development.

At prevailing Q1 2026 market benchmarks, this represents an indicative development value of approximately Rs 16.7 lakh crore.

The findings point to a broader shift in India’s real estate landscape, with infrastructure expansion, larger land parcels and emerging urban centres shaping the country’s next development cycle.