Global Capability Centres to lease 60-62 mn sq ft in India by 2025

CBRE South Asia Pvt. Ltd, a real estate consulting firm in India, has released a report titled 'India’s Global Capability Centres-charting a New Technology Era,' outlining the growth and trends of Global Capability Centres (GCCs) in the country. According to the report, GCCs are projected to lease approximately 60-62 million square feet of office space between 2023-2025, with technology, BFSI, and engineering & manufacturing sectors leading the leasing activity.

Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, said, “India has emerged as the most preferred destination for GCCs worldwide, and the growth of GCCs in India is a testament to the country's skilled talent, cost efficiency, favourable business environment, and government support. Post the pandemic, global firms were nudged to re-evaluate their business offerings to increase digitisation levels. In a bid to ensure business agility, improve efficiency and make their businesses resilient, a higher number of MNCs explored multi-functional GCCs in India. Gradually, mid, and smaller-sized firms also started venturing into the Indian shores to enhance their offerings.

Key Findings

Sector leadership: Technology, BFSI, and engineering & manufacturing sectors are anticipated to lead leasing activity among GCCs, with emerging sectors like life sciences, automobiles, and aviation contributing to the growth.

Expansion drivers: Availability and cost of talent, real estate, and a supportive regulatory framework are identified as key drivers for GCCs expansion in India.

Long-term intent: GCCs are now leasing larger offices with the potential for future scalability, indicating the long-term commitment of global corporations in India.

North American firms: North American firms continue to be the mainstay of GCCs in India.

Estimated growth: By 2025, the report estimates approximately 1900 operational GCCs in India, up from the existing 1580, with GCC leasing activity accounting for 35-40 per cent of overall office leasing.

Global attractiveness: Among the top emerging GCC hubs globally, India stands out for its cost and talent attractiveness, making it the preferred destination for GCCs.

Top Micro Markets for Upcoming Supply (2023-2025)

• Delhi-NCR: Noida Expressway; Extended Golf Course Road
• Mumbai: Navi Mumbai; Extended Business District
• Bangalore: North Bangalore; Outer Ring Road
• Chennai: OMR Zone 2; Mount Poonamallee Road
• Hyderabad: IT Corridor 2; Extended IT Corridor
• Pune: PBD North-East; SBD North-West

City-wise Trends (Jan-Jun’23)

Bangalore: Continued as the preferred GCC market with 44 per cent leasing share and 13 million square ft space take-up.

Chennai: Emerged as the second preferred GCC market with a 13 per cent leasing share and 4 million square ft space take-up.

Hyderabad: Remained in the top three cities with 20 per cent leasing share and 6 million square feet of space take-up.

Pune: Exhibited growth with a 10 per cent leasing share and 3 million square feet of space take-up.

Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, said, "From a commercial real estate perspective, GCCs in India form a large occupier group and are often the first to adapt and innovate, setting a precedence for other occupier groups. Most GCCs in India continue to adopt a hybrid workstyle, they will likely continue to take up large office space to enhance collaboration and innovation – key performance enablers for most GCCs. We believe that the incremental growth over the next two to three years will continue to be across the top metro cities. From a workplace perspective, the health and well-being of employees will continue to be of paramount significance for GCCs, with offices built for a multi-generational workforce”. 

The findings indicate a strong pipeline of new developments in emerging micro markets, creating new hubs for GCC activity. The growth of GCCs is expected to have a substantial impact on India's real estate landscape.