Realtors told the media that developers in Tier-2 cities have started getting institutional funding after the Covid-19 pandemic hit housing and commercial space in smaller cities. Developers, including Sushma Group, Bhumika, and Omaxe, which primarily have operations in Tier-2 cities, have recently received funding and will raise more funds for the next development phase. Director and CEO of Motilal Oswal Real Estate (MORE), Sharad Mittal, said that with the increase in internet penetration, adoption of technology and the Covid-19 pandemic, Tier-2 cities are gradually increasing their contribution to the overall Gross Domestic Product (GDP) and real estate. The company will focus on investing in Tier-1 and Tier-2 cities. MORE made a Rs 100 crore investment in a Chandigarh residential project with Sushma Group in the quarter ended on 31 March. The company will continue to explore such opportunities in the future. Till now, it has invested in more than 100 projects and obtained about 50 exits from Tier-1 cities. Bhumika Group has recently raised about Rs 100 crore between debt and two Lease Rental Discounting (LRD) transactions. The company will fundraise another Rs 200 crore in debt to fund the construction of Phase-2 of its 3.5 lakh sq ft retail space in Udaipur mall. Managing Director of Bhumika Group, Uddhav Poddar, said that the company is now getting a better rate of interest, and large funding institutions are interested in funding. Demand for organised retail has increased, with more projects being expected to execute. The developers will need funding to sustain the momentum. Omaxe has recently raised Rs 440 crore from Varde Partners for expediting the construction and delivery of its projects and investment in new projects. Most of the projects are in Tier-2 cities, present in 27 cities across eight states, including Uttar Pradesh, Madhya Pradesh, Punjab, Haryana, Uttarakhand, Rajasthan, Delhi, and Himachal Pradesh. As per a report, private equity investment inflows in the Indian real estate sector stood at $1 billion during the first quarter (Q1) of 2022, almost five times the quantum recorded during the fourth quarter (Q4) of 2021. Image Source Also read: Budget 2022 focuses on new smart-tier 2-3 cities