Cushman & Wakefield Report Predicts 50% Urbanization in India by 2050, Spotlights Tier-2 City Growth


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    India is set to undergo significant urbanization, with an expected growth rate of around 36 percent in 2023 and a projection of 50 percent urbanization by 2050. This shift in demographics is driving the real estate sector’s focus toward tier-2 cities such as Bhubaneswar, Coimbatore, Indore, Jaipur, Kochi, Lucknow, Nagpur, Surat, Thiruvananthapuram, and Visakhapatnam, which offer promising development potential, according to a report released by Cushman and Wakefield, a real estate consultant, and the Confederation of Real Estate Developers’ Associations of India (CREDAI).

    The 21st edition of NATCON, CREDAI’s annual real estate national convention held in Egypt with over 1400 delegates in attendance, is currently underway. The convention is facilitating discussions on various real estate topics, including technological innovations, fragmented ownership through tokens, sustainable and green housing, commercial real estate, and growth in tier 2, 3, and 4 centers.

    While Delhi NCR, Mumbai, Bengaluru, Pune, Hyderabad, Chennai, Kolkata, and Ahmedabad continue to be the key real estate markets in India, the report suggests that the 10 selected tier-2 cities will contribute significantly to India’s economic growth and development.

    The selection of these tier-2 cities was based on multiple indicators, including population, infrastructure, talent pool, income levels, ease of living, and housing affordability. The report emphasizes that the rapid urbanization in tier-1 cities is straining existing infrastructure and pushing attention towards tier-2 cities that possess the necessary advantages and development potential to meet the real estate sector’s demands.

    Boman R Irani, President of CREDAI, believes that this report will offer valuable insights to corporate occupiers exploring alternative locations and provide developers with opportunities in emerging cities. Anshul Jain, Head of APAC Tenant Representation and Managing Director for India & South East Asia, underscores the importance of tier-2 cities in contributing to India’s nation-building narrative.

    The report predicts that India’s urbanization rate will reach 40 percent by the end of the decade and 50 percent by 2050, surpassing global urbanization trends. Rising incomes and consumption levels are attracting retail investments to tier-2 cities, leading to the development of Grade-A malls and prominent high streets. The residential sector in these cities is also growing, with an emphasis on affordability.

    Manoj Gaur, Chairman of Credai National, emphasized the need for the real estate sector to learn from past mistakes, be accountable to customers and stakeholders, and adopt new technologies.

    The report’s methodology involved considering parameters such as population, economic size, commercial real estate market momentum, occupiers’ interest, tertiary education enrolment, ease of living, infrastructure, talent pool availability, income levels, housing affordability, metro development, and GDP per capita. These parameters collectively offer a comprehensive view of the development potential of the selected tier-2 cities.

    Cushman & Wakefield India conducted extensive research to shortlist the 17 cities representing all regions of India based on economic size, market momentum, occupiers’ interest, and internal on-ground research. These cities were then evaluated using a detailed scorecard, taking into account their market size, growth, living conditions, infrastructure, talent pool, income levels, and housing affordability.

    The report aims to assist corporate occupiers, retail brands, and potential migrants in making informed decisions about entering or relocating to these emerging tier-2 cities in India.

    Also Read: India’s Office Leasing Soars 5% to an 18-Month High in Q3 2023 Despite Global Challenges


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