With property prices skyrocketing in Mumbai, Delhi, and Bengaluru, real estate investors are scrambling for alternatives. Property research firm Colliers India in a report has identified 17 emerging hotspots one should be looking at. 

These are Amritsar, Ayodhya, Jaipur, Kanpur, Lucknow, and Varanasi in the North; Patna and Puri in the East; Dwarka, Nagpur, Shirdi, and Surat in the West; and Coimbatore, Kochi, Tirupati, Visakhapatnam, and Indore in the South.

These cities are set to experience rapid growth across various property types including offices, warehousing, tourism, residential, and senior living, according to the report. A decentralized work environment and the preference shift towards tier-two cities are key drivers of this growth.

Badal Yagnik, CEO of Colliers India, highlighted four main factors driving their analysis: changes in workspace landscapes, infrastructure growth in various corridors, tourism (especially spiritual tourism), and increased digitalization due to internet penetration.

The report outlines specific trends in these cities. Coimbatore, Indore, and Kochi are emerging as strong satellite office markets, while Jaipur, Kanpur, Lucknow, Nagpur, Patna, and Surat are expected to see heightened digitalization. Cities such as Amritsar, Ayodhya, Dwarka, Puri, Shirdi, Tirupati, and Varanasi are poised to benefit from growth in spiritual tourism.

Colliers projects India's real estate sector to reach $1 trillion by 2030 and potentially $5 trillion by 2050.

By 2050, India is expected to have nearly 100 cities with populations exceeding one million, in addition to its eight mega-cities. National Infrastructure Pipeline (NIP) and PM GatiShakti projects are crucial in driving growth beyond Tier I cities. Enhanced connectivity and manufacturing activities are expected to spur demand across warehousing and residential segments in these emerging hotspots. The shift towards hybrid work models is increasing demand for office spaces in smaller cities.

Digital penetration is transforming smaller towns into hubs for data centers and smart infrastructure. Cities like Jaipur, Kanpur, and Lucknow are anticipated to see significant real estate activity driven by e-commerce and data consumption, leading to the development of fulfillment centers and warehouses. Temple towns like Amritsar, Ayodhya, Varanasi, and Tirupati will benefit from spiritual tourism, supported by infrastructure improvements and government policies, attracting investments in the hospitality and retail sectors.

Vimal Nadar, Senior Director & Head of Research at Colliers India, noted that as tech giants and innovative start-ups tap into the skilled talent pools of emerging hubs, smaller cities are on the brink of a transformative boom in both office and residential markets. Office rental arbitrage, typically 20-30 percent lower, and affordable housing in these locales create a win-win scenario for companies and employees alike.