In a comprehensive analysis, CBRE South Asia, a prominent real estate consulting firm, anticipates a significant surge in the leasing of office space by Global Capability Centres (GCCs) in India. Projections suggest that between 2023 and 2025, GCCs are poised to secure office spaces totaling 60-62 million square feet, with technology, banking, financial services & insurance (BFSI), and engineering & manufacturing sectors taking the lead in leasing activities.
The report highlights a noteworthy trend wherein GCCs are opting for more expansive office spaces, emphasizing their potential for future scalability. North American companies continue to dominate the GCC landscape in India, leveraging factors such as the availability of skilled talent, cost-effective real estate, and a supportive regulatory framework.
By 2025, the report estimates a remarkable increase in the total number of operational GCCs, reaching 1,900 from the existing 1,580. Furthermore, GCC leasing activities are expected to contribute significantly to overall office leasing, accounting for 35-40% during this period.
India emerges as the most attractive destination for GCCs among top emerging hubs globally, given its favorable cost and talent attractiveness score. The report underlines the nation’s status as the preferred choice for GCCs, surpassing other emerging hubs like Brazil, Chile, China, the Czech Republic, Hungary, the Philippines, and Poland.
The study also identifies the top six cities—Delhi, Bengaluru, Mumbai, Chennai, Pune, and Hyderabad—as focal points for a robust pipeline of new developments in emerging micro-markets. These developments are geared towards providing high-quality office space, aligning with the expansion plans of GCCs.
CBRE’s findings shed light on the continued dominance of Bengaluru in GCC leasing, accounting for the largest share during the first half of 2023. Chennai has emerged as the second preferred market, while Hyderabad holds its position among the top three cities with substantial leasing activity by GCCs. Additionally, Pune is emerging as a burgeoning GCC hub, witnessing a notable increase in activity.
The report indicates a shift in strategy, with companies exploring tier-II cities for GCC setups, motivated by factors such as the reverse migration of talent and the adoption of hybrid working models. CBRE emphasizes that India’s maturing startup industry is likely to witness increased collaboration with the GCC sector, fostering innovation and growth in the global centers’ ecosystem.
Anshuman Magazine, Chairman and CEO, South-East Asia, Middle East & Africa at CBRE India, underscores India’s status as the preferred global destination for GCCs. The nation’s skilled talent pool, cost efficiency, conducive business environment, and government support contribute to the growth of GCCs, particularly in the post-pandemic era.
During the first half of 2023, GCCs played a pivotal role in overall office space leasing, commanding a 38% share across the six major cities. The cumulative leasing activity in Bengaluru, Chennai, and Hyderabad during this period exceeded 77% of total GCC leasing.
CBRE’s insightful report paints a promising trajectory for GCC leasing activities in India, reflecting the nation’s attractiveness as a strategic destination for global business operations.