India's Global Capability Centres (GCCs) are experiencing a remarkable surge, with a 17% year-on-year increase in office space leasing to 22.5 million square feet in the financial year 2023-24. The growth is primarily driven by sectors like Engineering and Manufacturing, BFSI, and Technology, with GCCs accounting for a 29% share of total office leasing in the last quarter. Geographically, Bengaluru, Hyderabad, and Delhi NCR lead the GCC expansion. India's strategic focus on digital technology, coupled with its competitive talent and rental costs, are instrumental in attracting global players to establish and expand their GCC presence in the country. The report projects India to host over 1,900 GCCs by 2025, with a professional talent pool exceeding 2 million.
Global Capability Centres (GCCs), which are offshore units of multinational firms, are making substantial strides in India. According to a report by CBRE, a real estate consultancy firm, the office space leasing by these GCCs increased by 17% year-on-year to 22.5 million square feet (msf) in the financial year 2023-24.
The report highlights that the growth during April 2023-March 2024 was primarily driven by key sectors such as Engineering and Manufacturing, BFSI (Banking, Financial Services, and Insurance), and Technology. In the last quarter of the fiscal year (January-March 2024), GCCs accounted for a 29% share of the total office space leased in India, with a total leasing of 4.2 msf.
Among the GCCs, engineering and manufacturing companies occupied over a quarter of the leased space, followed by automobile firms.
Geographically, the report indicates that around 60% of the total GCC leasing in January-March 2024 was in Bengaluru, followed by Hyderabad (26%) and Delhi NCR (9%). Mumbai and Pune contributed 4% and 1% respectively during the quarter.
Anshuman Magazine, Chairman and CEO of CBRE's India, South-East Asia, Middle East & Africa operations, stated that India's strategic emphasis on digital technology, along with its competitive costs for talent and rentals, remain instrumental in driving the growth of GCCs. He further highlighted that the gradual upskilling of talent and greater synergies between the private sector and educational institutions would continue to drive value creation in India.
The report reveals that GCCs have become a significant catalyst for change in the Indian office sector. During the 2017-2019 period, GCCs accounted for a 30-35% share of total office leasing in India, with over 1,250 operational centres. This share increased to 38-43% between 2020 and 2022, with over 1,580 operating GCCs and a talent pool of 1.66 million as of 2022. The report projects that India will host over 1,900 GCCs by 2025, with a professional talent pool exceeding 2 million.
The report also suggests that major global players in sectors like BFSI, technology, and engineering and manufacturing (E&M) are anticipated to further expand their GCC presence in India.
Ram Chandnani, Managing Director of Advisory and Transactions Services at CBRE India, highlighted that the trajectory of GCCs in India is shifting, driven by the demand for premium office spaces with modern amenities. This trend is attributed to India's vast reservoir of skilled professionals, which positions the country as a premier destination for GCCs seeking to tap into a diverse talent pool and enhance their operational capacities. Additionally, the country's competitive cost framework, encompassing talent, rentals, and operational costs, presents an attractive proposition for businesses aiming to optimize their expenses while maintaining high standards.
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