Tier-2 Cities Overtake Metros in India's Land Transactions

Tier-2 cities accounted for 67% of India's land transactions in the first quarter of 2026, overtaking major metropolitan markets for the first time, according to a Cushman & Wakefield report. The shift points to growing development activity in smaller urban centres and satellite markets as land in established metros becomes tighter and more expensive.

Cushman & Wakefield analysed more than 880 land transactions covering 18,158 acres across 33 cities between 2021 and Q1 2026. The land parcels could support nearly 1.4 billion square feet of future built-up development, with an indicative development value of about ₹16.67 lakh crore based on prevailing Q1 2026 market benchmarks.

The change in the geography of land buying has been particularly sharp in Tier-2 markets. Their annual share of land transactions rose from around 2% in 2021 to 34% in 2025. The amount of land transacted in these cities increased from just 16 acres in 2021 to 2,120 acres in 2025.

The size of individual deals has also moved in the opposite direction to the metros. The average Tier-I transaction declined from 21 acres in 2021 to 10 acres, while the average Tier-II deal increased from 8 acres to 53 acres, according to Cushman & Wakefield. Larger, contiguous parcels make projects such as integrated townships, industrial parks and other large-format developments easier to assemble outside established urban cores.

Several Tier-2 markets are seeing increased activity, including Coimbatore, Indore, Visakhapatnam, Ludhiana, Panipat and Nagpur. Satellite cities around major urban centres are also emerging as development corridors, according to the report.

Infrastructure is a major part of the story. Cushman & Wakefield said land transactions are increasingly concentrating along corridors supported by expressways, metro networks, industrial corridors and airports. Western and southern India together accounted for nearly 70% of total transacted acreage between 2021 and Q1 2026.

The broader land market has expanded rapidly. Annual transacted acreage increased from 813 acres in 2021 to 6,181 acres in 2025, representing an annualised growth rate of about 66%. Another 1,194 acres changed hands in the first quarter of 2026. Residential remained the largest land-use category, accounting for 45% of total acreage transacted during the period.

The land market is also becoming more diversified. Industrial and logistics acquisitions expanded nearly 13-fold in acreage between 2021-22 and 2024-25, while office-linked land transactions increased fivefold. Data centres have also become an increasingly visible component of land demand.

Developers are changing how they acquire land as prices rise. Outright purchases still accounted for more than 60% of transacted acreage, or 10,910 acres, but joint ventures and joint-development arrangements covered more than 4,405 acres. The number of such transactions increased from 11 in 2021 to 42 in 2025.

For homebuyers, the shift does not automatically mean cheaper housing. The data shows where developers are assembling land, rather than what eventual homes will cost. But it does indicate that the next generation of housing and other large developments is increasingly being planned beyond India's traditional metropolitan cores.

The scale of land already assembled also suggests that the effects will extend beyond the immediate transaction market. If the potential development identified by Cushman & Wakefield is realised, Tier-2 cities and emerging corridors could account for a significant share of the physical expansion of India's urban landscape over the coming years.

Sources

https://economictimes.indiatimes.com/industry/services/property-/-cstruction/tier-2-cities-overtake-metros-in-land-deals-for-first-time-signalling-real-estate-shift/articleshow/134284420.cms

https://cw-prod-emeagws-a-cd.cushwake.com/en/india/news/2026/09/india-land-transactions-growth-2026

https://www.business-standard.com/industry/news/india-land-transactions-cushman-wakefield-tier-2-cities-126090900453_1.html

https://www.moneycontrol.com/news/business/real-estate/tier-2-cities-overtake-metros-in-land-deals-as-1-4-billion-sq-ft-future-supply-takes-shape-report-14026966.html

https://timesofindia.indiatimes.com/real-estate/news/strong-housing-demand-drives-7700-plus-acres-of-residential-land-deals/articleshow/133978768.cms