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Bengaluru has become a central hub for Global Capability Centers (GCCs), experiencing substantial leasing activity with a 37 per cent share from 2020 to 2023, according to Colliers’ recent report, “Global Capability Centers in India: A newfound wave of confidence”.
Bengaluru and Hyderabad together lead GCC leasing activity at a cumulative share of 60 per cent from 2020 to 2023. Chennai saw a notable 2.4x surge in 2023, while Pune and Mumbai witnessed over 1.7X growth compared to 2022.
Surge in demand
Vimal Nadar, Senior Director and Head of Research, Colliers India said, “Sub and near dollar micro markets remain pivotal for GCC space uptake in India, contributing nearly 80 per cent of the leasing activity. Looking ahead, SBDs will remain GCC epicenters for their proximity to talent pools and business hubs, while PBDs will witness increased interest, especially from non-tech sectors. Improved business sentiments and positive economic outlook is likely to drive heightened demand for office spaces including GCCs in the country.”
Over the next two years, GCCs are expected to lease about 45-50 million sq ft of office space, accounting for approximately 40 per cent of the total office demand across the top 6 cities. This is happening because businesses are feeling more positive about the economy and foreign companies are showing confidence by choosing India to set up their operations.
Despite challenges like the pandemic and global tensions in the past few years, these companies kept expanding, with a 14 per cent y-o-y increase in leasing activity in 2023, according to Colliers’ report. The second half of 2023 saw the highest leasing activity by GCCs since 2020, hitting 12.4 million sq ft. This trend is expected to continue, shaping India’s office space scene in the near future, driven by cost-effective options and the availability of skilled talent.
The report highlights the pivotal role GCCs will continue to play in shaping India’s commercial real estate landscape in near future. Driven by cost-effective offerings and a talent-rich environment, foreign companies will continue their expansions in India, further bolstering GCC demand in near to mid-term.
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