Investors are increasingly turning to Tier-2 towns for land banking strategies. A shift powered by fresh infrastructure, affordable entry points and rising demand patterns. Recent data shows that Tier-2 cities like Coimbatore, Lucknow, Indore, etc, now offer rental yields ranging from 6 to 9%, and in some segments (warehousing, industrial), up to 12 to 16%.
Here is a deep dive into how land banking investment in these emerging locations can work, what to watch out for and how G Square projects in Tier-2 cities align with a wise strategy for high-potential property markets.
Why Land Banking Matters in 2025?
Land banking strategies involve acquiring land or plots ahead of major growth triggers and holding them until the value appreciates. The benefits of land banking include lower entry costs, potential for large capital gains and control over land use compared to already developed real estate.
In 2025, several Tier-2 towns are providing fertile ground for such strategies, due to:
- Government incentives and simplified approvals in emerging towns
- Lower congestion, less pollution and greener living environments compared to metros
- Rapid infrastructure investment, such as airport expansion, highways, industrial corridors and metro/transport hubs
Picking Tier-2 Towns: Key Criteria and Examples
When executing land banking strategies, choosing the right town and zone matters. Here are critical criteria, followed by some examples with high return potential.
- Proximity to major infrastructure (airports, highways, industrial parks)
- Planned or upcoming transport projects (metro, expressways, bypasses)
- Local industrial and IT sector growth
- Land supply and regulatory ease
- Affordability and entry cost vs probable appreciation
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Cities to Watch and Their Advantages:
These Tier-2 cities represent some of the highest potential property markets outside metros in 2025.
- Coimbatore: Manufacturing, textiles, IT education hubs, airport expansion, Avinashi Road corridor growth.
- Lucknow: Metro projects, with strong commercial absorption, witnessed a 23% property appreciation in 2025.
- Indore, Jaipur and Nagpur: All benefiting from industrial corridors, connectivity and rising leasing demand.
How to Execute a Strong Land Banking Strategy?
To maximise the benefits of land banking strategies, consider the following steps:
- Identify Upcoming Infrastructure: Monitor government announcements, airport expansions, bypass or metro routes.
- Zoning and Master Plans: Ensure the land is likely to be developed for residential or industrial use, depending on your goal.
- Buy in Areas with Connectivity: Make sure the location has access to main roads and has proximity to major hubs.
- Hold Horizon: Hold the land long enough to get the best returns from appreciation; land banking investment rarely pays in 1 to 2 years.
Coimbatore: A Tier-2 Town with Strong Land Banking Potential
Coimbatore is showing multiple indicators of becoming one of the best Tier-2 towns for real estate investment in 2025. Here are some relevant factors:
- Coimbatore International Airport is about 11.4 km from the city centre, serving both domestic and international flights.
- With the rise of passenger traffic, domestic and international flights both saw increases in recent years.
- Avinashi Road is a key arterial which is currently undergoing widening and flyover projects.
- Plans such as Coimbatore Metro (corridors connecting the airport and key hubs) are in progress.
All these factors support the case that land banking investment in Coimbatore can yield strong returns. Investors can expect 6-9% of rental yields in Coimbatore.
Two Major G Square Projects in Coimbatore
To illustrate how land banking strategies may map to actual opportunities, here are two G Square projects in Coimbatore that align well with high-potential property markets. These projects deserve close consideration for those seeking balanced investment.
Positioned in one of Coimbatore’s well-connected residential neighbourhoods, G Square Futura offers a combination of accessibility and long-term growth potential. Some of its key highlights include:
- Located in SIHS Colony, well connected via local roads to major IT corridors and educational institutions.
- Spread across 3.78 acres, this property is ideal for buyers and investors looking for land with residential development potential.
- 15 world-class amenities, including 24×7 CCTV surveillance, 1 year of free maintenance and post-purchase assistance.
For those seeking a more affordable entry point into Coimbatore’s expanding real estate market, G Square The Wind in Pannimadai presents a compelling plot. Here are some highlights of the project:
- Ready-to-construct residential villa plots spread across 4.51 acres.
- Plots are approved by DTCP and have well-laid blacktop internal roads with street lights.
These two projects of G Square offer a blend of affordability, strong urbanisation advantages and proximity to essential zones. These are exactly what investors are seeking to get maximum ROI from land banking.
Final Thoughts
Land banking strategies in 2025 are especially promising when focused on Tier-2 towns with the right mix of infrastructure growth and affordability. Such cities offer expanding airports, arterial road improvements, metro planning and rising commercial demand. For investors willing to hold over medium to long terms, returns can be substantial.
If you would like to explore opportunities in any of the growing Tier-2 cities, connect with G Square Housing. Call us now at +91 89395 40008 to enquire about a free site visit.
