The Role of Tier 2 Cities in the Next Phase of GCC Expansion | CBRE India

As India’s Global Capability Centres (GCCs) continue to evolve into strategic value drivers for global enterprises, the next phase of their growth may be unfolding beyond the traditional metros. Tier 2 cities, once primarily viewed as talent hubs, are now emerging as competitive destinations in their own right.

Looking forward, technology companies are expected to lead this shift. CBRE anticipates a significant rise in Global Capability Centres being established in select Tier 2 cities. This move is driven by a combination of factors: an abundance of skilled talent, improving infrastructure, and evolving occupier strategies that seek diversification beyond the main gateway markets.

A Market in Transition

India’s office sector remains resilient, with office leasing activity reaching 18 million sq. ft in Q1 2025*. GCCs are playing a key role in driving absorption across important markets. With healthy supply growth and a strong pipeline of under-construction projects — particularly in investment-grade tech parks — the momentum is expected to continue throughout the year.

While cities like Bengaluru, Hyderabad, NCR, and Mumbai continue to lead in demand, cities such as Pune and Chennai are also gaining traction. This trend, spurred by high-quality infrastructure and a skilled talent pool, is expected to extend to Tier 2 markets, creating new demand in emerging urban hubs.

Why Tier 2 Cities?

Tier 2 cities are emerging as the next growth hubs, offering a compelling combination of affordability, accessibility, and long-term opportunities. As companies shift to hybrid models and seek more diverse talent, these cities are becoming pivotal players in the GCC landscape.

Strategic Advantage: With a balance of cost-effectiveness and growth potential, Tier 2 cities are ideal for businesses looking to expand.

Innovative Infrastructure: These cities are equipped with tech-driven, sustainable facilities that support businesses in a digital-first world.

Talent Access: A young, dynamic workforce and growing educational institutions ensure a continuous supply of skilled talent.

High-Quality Amenities: World-class amenities foster a healthy work-life balance, enhancing employee engagement and satisfaction.

Tier 2 cities are no longer just cost-effective alternatives; they are transforming into innovation and growth hubs, making them an essential part of the future of Global Capability Centres.

The Talent Equation

The success of this transition depends on the continued availability of skilled talent in these emerging markets. To ensure sustainability, companies are expected to strengthen ties with educational institutions, invest in upskilling programs, and build ecosystems capable of supporting large-scale transformation.

This model has already proven successful in Tier 1 cities, and Tier 2 markets now offer the opportunity to replicate — and localise — this success. As GCCs move to these cities, talent development will be key to their sustained growth.

The Road Ahead

The evolution of Global Capability Centres from service centres to strategic innovation engines is reshaping India’s office market. In the coming years, Tier 2 cities will not just be participants in this transformation — they will be leading it.

With a supportive policy environment, a young and talented workforce, and rising private sector interest, these markets are set to become the next vital nodes in India’s global innovation grid.

CBRE is committed to monitoring this shift, helping occupiers and investors navigate the increasingly distributed, future-ready office landscape.

CBRE - A Trusted Partner For GCCs In India

With deep-rooted expertise and a future-focused approach, CBRE has played a pivotal role in shaping India’s Global Capability Centre (GCC) landscape. We’ve supported the set-up of over 400 GCCs across the country — from strategy and location advisory to build-out, talent planning, and ongoing optimisation.

Our strength lies in delivering end-to-end solutions tailored to the unique needs of global enterprises. Whether you're entering a Tier 1 market or exploring the potential of emerging Tier 2 cities, CBRE brings unmatched insights, local intelligence, and global best practices to the table.