Leasing by Global Capability Centres in India surges 17% to 22.5 million square feet in FY2023-24: CBRE

Leasing by Global Capability Centres in India surged 17 % YOY, recording 22.5 msf in FY 2023-24

Global Capability Centres (GCC) are making huge strides in India with office space leasing by such offshore units of multinational firms increasing by 17 percent year-on-year to 22.5 million square feet (msf) in the financial year 2023-24, according to a report by CBRE, a real estate consultancy firm.
The report said 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 sectors. In January-March 2024, GCCs had a 29 percent share of the total office space leased in India. Notably, the total leasing by GCCs stood at 4.2 msf in Q4FY24. Among these GCCs, engineering and manufacturing companies accounted for over a quarter of the space, followed by automobile firms.

Around 60 percent of the total GCC leasing in January-March 2024 was in Bengaluru followed by Hyderabad (26 percent) and Delhi NCR (9 percent). Mumbai and Pune contributed 4 percent and 1 percent each during the quarter.

Also Read: Bengaluru dominates chip GCC's in India with 42% of total units, says report

Anshuman Magazine, Chairman and CEO - India, South-East Asia, Middle East & Africa, CBRE, said, “With projections indicating significant leasing by GCCs at 40-45 million square feet between 2024 and 2025, India's strategic emphasis on digital technology, combined with its competitive costs for talent and rentals, remains instrumental in propelling the growth. The gradual upskilling of talent in existing as well as new roles and greater synergies between the private sector and educational institutions would continue to drive value creation in India.”

Explosive growth

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The report said that the GCC sector saw a 30-35 percent share of total office leasing in India in the 2017-2019 period with over 1,250 operational GCCs. Between 2020 and 2022, GCCs accounted for 38–43 percent of the total office space leasing, housing over 1,580 operating GCCs with a talent pool of 1.66 million as of 2022. India is expected to host over 1,900 GCCs by 2025 with a professional talent pool that exceeds 2 million.

The report stated that major global players in sectors like BFSI, technology, and engineering and manufacturing (E&M) are anticipated to grow their GCC presence in India.

Also Read: Global Capability Centres cross 202 million sq. ft as office stock occupiers across six cities

Ram Chandnani, Managing Director, Advisory and Transactions Services, CBRE India, said the trajectory of GCCs in India is shifting, driven by the demand for premium office spaces with modern amenities.

“Occupiers prioritise quality, seeking superior infrastructure and engaging environments. This trend, along with improving office occupancies and evolving work patterns, will increase investment in high-quality spaces for GCCs. India's growth as a global hub for innovation and talent underscores the country's potential as a prime destination for business expansion,” Chandnani said.