Bengaluru leads GCC leasing in India with 15.3 mn sq ft of absorption in 2023: Experts

The office leasing by GCCs estimated to reach 26 msf by 2027 up from 19.69 msf in 2023.

Bengaluru led the global capacity centres (GCC) leasing with over 15.34 million sq ft (msf) of absorption in 2023 among the top eight cities, Rahil Gibran, national director of Occupier Strategy and Solutions at Knight Frank India, told Moneycontrol on the sidelines of the GCC X Summit 2024.

For BFSI, Mumbai leads with the highest percentage (at 35 percent share) of GCCs under the BFSI sector and Bengaluru leads with the highest percentage of GCCs (at 53 percent share) in the IT/ITeS sector, the report launched by Knight Frank India said.

The top eight cities include Bengaluru, Hyderabad, Chennai, Ahmedabad, Pune, Mumbai, NCR and Kolkata.

The office leasing by GCCs estimated to reach 26 msf by 2027 up from 19.69 msf in 2023. Transaction activities have increased by 16 percent from 16.99 msf in 2018 with GCCs completing 6,667 office leasing deals across eight major cities between 2018 and 2023, the report said.

"While there was a bit of slowdown in Bengaluru's IT sector following the global economy, the GCCs ramped up its leasing and will continue the momentum," Gibran said.

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According to Ernst and Young estimates, it is expected that by the end of 2024, the total revenue generated by all GCCs operating in India will be around $46 billion.

"If we look at the total number of GCCs in India, it had only 1,250 GCCs in 2019, which increased to around 1,600 in 2023. Our optimistic estimation is for the number of GCCs to reach around 2525 by 2030 if we have a stable government and Industry friendly policies; but if the market slows down, our conservative estimate is for the number of GCCs to reach 2006 by the year 2030," the report added.

Between 2018 and 2023, around 5,349 GCC deals across the eight cities were finalised under 50,000 sq ft; 790 GCC deals took place between 50,000 and 1 lakh sq ft. And, around 528 GCC deals of above 1 lakh sq ft were the largest deals signed between 2018 and 2023, it said.