Key Emerging Tier 2 and Tier 3 Cities in 2025

Key Emerging Tier 2 and Tier 3 Cities in 2025

Coimbatore, Tamil Nadu

Coimbatore stands out with a 14.42% surge in property registration revenue, signaling robust real estate activity. The 714-acre Kovai Hills township project estimated at Rs. 707 crores and an 18-acre AI Center of Excellence (CoE) spanning 2 million sq. ft. position the city as a major tech startup hub. It recorded the highest land deals in the first half of 2025, reflecting strong investor confidence.

Thiruvananthapuram, Kerala

The city is witnessing a strong residential real estate market alongside the development of a 38,207 sq. ft. data center park. New technoparks are coming up, and fintech innovation is exemplified by a startup launching an AI solution to detect fake gold loan frauds. Additionally, a 7.48-acre industrial park was announced recently, enhancing the city’s industrial base.

Visakhapatnam, Andhra Pradesh

Visakhapatnam is marked by Google's and AdaniConneX's plans for a massive $15 billion AI data center campus over five years. K Raheja Corporation secured approval for a Rs. 2172.28 crore project on 27 acres in Madhurawada. Industrial growth includes the commissioning of a 660,000 tonnes per annum cement grinding plant by NCL Industries Ltd, with Rs. 250 crore investment. A Rs. 222 crore coastal erosion mitigation project for a 30 km stretch has also been greenlit.

Lucknow, Uttar Pradesh

Lucknow saw a striking approx. 48% increase in housing sales value in Q1 2025. The Uttar Pradesh State Industrial Development Authority executed 13 major plot allotments, supporting industrial growth. Sify Infrastructure is building a data center, with Rs. 10,732 crore earmarked for developing Lucknow as India’s first AI City under the IndiaAI Mission.

Indore, Madhya Pradesh

The Indore Development Authority's approval of selling 600 flats, 40 shops, and 24 plots aims to boost revenue. Infrastructure projects including bridges and elevated corridors are underway. The city is also home to RackBank, an AI infrastructure startup securing land for data center operations. An IT Park offering 70,000 sq. ft. office space on a 30-year lease is planned by the Madhya Pradesh Industrial Development Corporation.

Nagpur, Maharashtra

Nagpur is acquiring 1710 acres for an international business and finance center that has sparked a land rush with values around Rs. 2 crore per acre. Maharashtra’s government announced a data center park here to accelerate the digital economy. Nagpur is emerging as a key defense and aerospace manufacturing hub within the MIHAN Special Economic Zone.

Kochi, Kerala

Kochi’s ongoing Infopark phase III spans 300 acres utilizing a land pooling model, with phase IV adding 33.5 acres and an estimated Rs. 3000 crore investment. A Rs. 25,000 crore tech township is planned, promising direct employment for 200,000 and indirect for 400,000. Logistics and industrial parks by Adani Ports and Panattoni are expanding the city’s industrial landscape. IBM’s launch of an ecosystem incubation center supports startups through mentorship, hackathons, and proof-of-concept initiatives.

Bhubaneswar, Odisha

The Odisha University of Technology and Research is setting up centers of excellence for design, AI, and robotics, expected operational by March 2026. The central government sanctioned a Rs. 7000 crore plan to develop Odisha as an IT hub. Major semiconductor units have been approved by the cabinet in Bhubaneswar’s Info Valley, including projects by SiCSem Pvt Ltd and 3D Glass Solutions Inc.

Conclusion

These Tier 2 and Tier 3 cities represent a powerful evolution in India’s development model, driven by upgraded infrastructure, metro and airport expansions, and emerging industrial corridors. They offer fertile ground for real estate, business innovation, and employment generation, making them attractive destinations for long-term investment by corporates, entrepreneurs, and professionals seeking growth beyond the traditional metropolitan centers.