As per a report from Knight Frank India, a property consultancy firm, focusing on Tier-2 cities in India, particularly Lucknow, Tier-2 cities are increasingly becoming an important player in the country’s retail sector, leading an 18.4 per cent share of gross leasable area. This growth is linked to various factors such as economic development, job opportunities, growing incomes, and the increasing reach of e-commerce into smaller markets. Accordingly, these cities are pushing growth in the real estate sector, stimulating investments and development projects.
Aside from Lucknow, other Tier-2 cities contributing considerably to shopping center stock are Kochi, Jaipur, Indore, and Kozhikode.
Shishir Baijal, Chairman and MD of Knight Frank India, shared, “India’s retail landscape is affected by a host of factors, counting its large population, enhancements in digital literacy, and economic growth. These factors join to push the retail sector’s growth, chiefly in transforming retail spaces into versatile hubs of commerce and entertainment.”
The report notes that shopping center development in Tier-2 cities has adhered to an unusual trajectory, in comparison to Tier-1 markets. While Tier-1 cities saw the founding of shopping centers as early as the 1990s, Tier-2 cities saw their coming out in the early 2000s, ensuing in the popularity of relatively smaller shopping centers. Nevertheless, there are signs of progress, with a change towards larger and stronger retail infrastructure in Tier-2 cities, signaling the sector’s next stage of growth in India.
In spite of challenges presented by the pandemic, the retail sector is tough, with emerging trends such as revenge shopping, influencer marketing, and Generation Z-focused strategies modifying the brick-and-mortar shopping experience and forging unique environments for consumers. This change reflects the sector’s vigour and widespread presence around the country.
Bharat Tex Special Report 2026 
