New Delhi, May 25: India's real estate developers are shifting their strategies to align with the aspirations of Gen Z, the tech-savvy and globally aware generation born between 1997 and 2012. This generational shift is sparking a transformation in the commercial real estate landscape, particularly in tier II and tier III cities, say industry executives.
Developers are increasingly investing in amenities that appeal to younger demographics — including luxury cafes, gaming zones, fine-dining restaurants, salons, malls, and exhibition centers — to meet rising demand in smaller cities. As Gen Z’s influence grows, especially in non-metro areas, the sector is witnessing a noticeable transition from traditional infrastructure to modern, lifestyle-centric development.
“Gen Z culture is far more mature today, largely thanks to technology. Even middle-income families in Punjab now have children studying across India and abroad. These youth return with world-class aspirations,” said Adish Oswal, Chairman and Managing Director of Oswal Group.
His company, under the Vardhman Amrante brand, recently announced a ₹1,350 crore investment in Punjab’s real estate sector, targeting cities like Ludhiana. The investment spans commercial, residential, hospitality, industrial, and allied developments.
The real estate shift is particularly evident in emerging urban hubs like Amritsar, Karnal, and Meerut. Santosh Agarwal, Executive Director and CFO of Alpha Corp, noted, “Gen Z is reshaping the commercial real estate landscape in tier II and III cities. These cities are now benefiting from better infrastructure, improved connectivity, and a growing appetite for tech-enabled workspaces.”
According to the India Brand Equity Foundation (IBEF), the Indian real estate sector is projected to grow at a compound annual growth rate (CAGR) of 9.2% between 2023 and 2028 — a sign of strong investor confidence and market momentum.
Shrinivas Rao, FRICS and CEO of Vestian, added that regional developers have accelerated the delivery of custom-built commercial assets that align with the needs of this new workforce. “At the same time, top-tier developers from metro cities are expanding into these high-potential non-metro markets to strengthen their footprint,” he said.
The rise in demand for office space in tier II and III cities is fueled by decentralized work models, rapid infrastructure development, and the presence of a skilled workforce. Currently, nearly 15% of India's tech talent resides in these smaller cities, making them crucial nodes in the country’s employment and innovation ecosystem.
Vimal Nadar, National Director & Head of Research at Colliers India, emphasized the role of startups in driving demand: “The startup boom in tier II cities has further elevated the need for quality commercial spaces. Recognizing this potential, developers are increasingly offering high-grade assets across asset classes in these emerging markets.”
As India’s urbanization spreads beyond metros, tier II and III cities are becoming dynamic centers of growth — and Gen Z is at the forefront of this transformation.
(With agency inputs)
