Coworking spaces are no longer just a trend; they are a fundamental part of India’s evolving work culture. Whether you’re a startup founder, a remote worker, or an enterprise team lead, the shift towards flexible workspaces has likely caught your attention. While coworking exploded first in Tier 1 cities like Bengaluru and Mumbai, Tier 2 cities like Jaipur and Coimbatore are rapidly catching up.
In this article, we will explore the growth patterns of coworking spaces in Tier 1 versus Tier 2 cities, compare the opportunities and challenges, and help you decide which city type suits your business’s next move.
Understanding Tier 1 and Tier 2 Cities in India
Before diving deeper, it’s important to define the landscape.
Tier 1 cities in India include:
- Bengaluru
- Mumbai
- Delhi NCR
- Chennai
- Hyderabad
- Kolkata
These are characterized by:
- High cost of living
- Dense commercial real estate
- High concentration of startups, MNCs, and freelancers
Tier 2 cities like:
- Jaipur
- Kochi
- Coimbatore
- Indore
- Lucknow
- Chandigarh
They are defined by:
- Rapid urbanization
- Growing startup ecosystems
- Affordable real estate
- Government support through smart city projects and IT parks
Understanding these dynamics will help you see how coworking growth is playing out differently across the country.
Growth of Coworking Spaces in Tier 1 Cities
Tier 1 cities were the early adopters of coworking culture in India. Brands like WeWork, Awfis, 91Springboard, and Innov8 found fertile ground to scale operations quickly.
According to Knight Frank’s India Real Estate Report 2023, coworking spaces accounted for 27% of total office space leasing in Tier 1 cities, up from 14% in 2019.
Several factors contributed to this surge:
- Presence of a massive freelance, startup, and tech worker population.
- Skyrocketing real estate prices forcing businesses to opt for flexible solutions.
- Corporate firms embracing hybrid work post-pandemic.
Top coworking hubs: Bengaluru’s HSR Layout, Mumbai’s BKC, Hyderabad’s HITEC City, and Delhi’s Connaught Place are leading the way.
Growth of Coworking Spaces in Tier 2 Cities
While Tier 1 cities matured, the real silent revolution has been happening in Tier 2 India.
A 2023 ANAROCK study shows a 40% YoY increase in coworking space absorption in Tier 2 cities, outpacing Tier 1 growth rates.
Why the boom in smaller cities?
- Reverse migration post-COVID: Many professionals returned to their hometowns and preferred working locally.
- Lower costs: Real estate in Tier 2 cities can be 50-60% cheaper than Tier 1, enabling coworking operators to offer affordable plans.
- Startup ecosystems are flourishing beyond metros with government incentives (Startup India, Smart Cities Mission).
- Growing presence of satellite offices for MNCs.
Popular Tier 2 coworking hubs: Jaipur’s C-Scheme, Coimbatore’s RS Puram, Chandigarh’s Industrial Area, and Lucknow’s Gomti Nagar.
Key Differences: Tier 1 vs Tier 2 Coworking Markets
| Factor | Tier 1 Cities | Tier 2 Cities |
| Real Estate Costs | High | Affordable |
| Market Maturity | Mature, competitive | Emerging, high-growth potential |
| Clientele | Startups, corporates, freelancers | Startups, freelancers, SMEs |
| Amenities | Premium, high-end | Functional, basic to mid-premium |
| Growth Rate | Steady (~13%) | Rapid (~20% YoY in some cities) |
| Focus | Premium experience | Affordability + community engagement |
If you are searching for coworking spaces “near me” in Tier 2 cities, expect slightly more affordable pricing compared to Tier 1—often saving 30-40% monthly!
Why Coworking is the Future in Both Tiers
Despite the differences, both Tier 1 and Tier 2 cities share one common future: a growing preference for flexibility.
A recent CBRE report found that 65% of Indian companies plan to adopt hybrid work permanently. This is pushing demand for plug-and-play spaces in every city, big or small.
Managed coworking spaces save businesses money by eliminating the need for long leases, maintenance costs, and upfront capital expenditure.
Whether you’re an enterprise exploring Tier 2 expansions or a startup finding your first office, coworking gives you a low-risk, high-reward solution.
Final Thoughts
The coworking landscape in India is undergoing a fascinating transformation. While Tier 1 cities will continue to dominate in terms of volume, Tier 2 cities are poised to become the next big frontier for flexible workspaces.
If you’re planning your next move, whether expanding your business or setting up your first office, understanding the dynamics between Tier 1 and Tier 2 coworking markets is crucial. Both offer unique advantages depending on your growth strategy, team needs, and budget.
Platforms like GoFloaters make it easier than ever to find the perfect coworking space across India, letting you focus on what matters most: building and scaling your business.
Also Read: A Complete Guide to Office Space Rental in Singapore: What Businesses Need to Know
