Representative image of an office space.
Credit: iStock Photo
Bengaluru: Led by demand from sectors including technology, banking, financial services and insurance (BFSI), engineering and manufacturing, global capability centres (GCCs) are expected to lease nearly 62 million square feet of office space between 2023-25, a new report by property consultancy CBRE revealed on Thursday.
Global capability centres are offshore facilities of large multinational corporations, tasked with providing support services such as IT, finance, human resources and so on. India holds a lion share in the segment globally, at about 50 per cent.
By 2025, the total number of operational GCCs in India is estimated to increase to 1,900, from 1,580 presently, to account for 35-40% of overall office leasing in the country.
“We believe that the incremental growth over the next two-three years will continue to be across the top metro cities,” Ram Chandnani, who is the managing director for advisory and transactions services at CBRE India, underscored.
While the Indian IT industry battles a rough patch, GCCs have kept the wheels turning for the tech industry, lured by availability and cost of talent, real estate and a supporting regulatory framework in the country. According to the report, India has the best cost and talent attractiveness score, which makes it the most sought-after destination for GCCs.
Furthermore, emerging sectors such as life sciences, automobile and aviation are also expected to further boost this growth trajectory, the report noted.
With 9.8 million square feet of leasing between January-June 2023, GCCs accounted for a 38% share in overall office space take-up across the six markets of Delhi NCR, Bengaluru, Chennai, Hyderabad, Mumbai and Pune.
During the six-month period, Bengaluru emerged as the leader with a 39% share in overall leasing by the GCC segment. Key micro markets in the city included Outer Ring Road and Whitefield, the report highlighted.
Chennai came in second with a 24% share while Hyderabad stood third accounting for 14% of overall space taken up during the first half of the calendar year.
Lastly, Pune is emerging as a GCC hub, with a 57% increase in space taken up between January-June 2023, compared to the corresponding period last year.
“Companies are also evaluating tier-II cities to set up their GCCs and expand their operations, encouraged by availability of talent due to the reverse migration observed during the pandemic, led by remote and hybrid working models,” said Anshuman Magazine, chairman and chief executive for India, South-East Asia, Middle East and Africa at CBRE.