Leasing by Global Capability Centres in India increases by 17%; touches 22.5 mn sq ft in FY 2023-24

Leasing by Global Capability Centres (GCC) increased by around 17% Y-o-Y in FY 2023-24 compared to FY 2022-23, touching 22.5 mn sq ft in FY 2023-24 as compared to 19.2 mn sq ft in FY 2022-23. This growth was primarily driven by key sectors such as engineering and manufacturing, BFSI and technology sectors, a report by CBRE has said.

Leasing by Global Capability Centres (GCC) increased by around 17% Y-o-Y in FY 2023-24 compared to FY 2022-23 touching 22.5 mn sq ft in FY 2023-24 as compared to 19.2 mn sq ft in FY 2022-23. (Picture for representational purposes only)(Pixabay)

GCCs are captive centres that handle operations (back-office functions, support functions, and contact centres) and IT support to enhance productivity. Some large companies use GCCs as a centre of excellence as well.

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Also Read: Global capability centres and third-party IT service providers lease over 46% of office space in India

Bengaluru tops the list of Global Capability Centres’ leasing in India with a share of 60% followed by Hyderabad at 26% and Delhi at 9%, a CBRE report has said, adding Mumbai contributed 4% share and Pune 1%.

In January-March 2024, GCCs leased around 29% of the total office space leased in India. Notably, the total leasing in the GCC segment stood at 4.2 mn sq ft in January to March 2024. Among these GCCs, engineering and manufacturing companies accounted for over a quarter of the space, with automobile firms following closely behind.

GCCs have become an important catalyst for change in the Indian office sector. With 1.3 mn talent as of 2019, the sector saw a 30–35% share of total office leasing in India in 2017-2019 period with over 1250 operational GCCs.

Also Read: Bengaluru and Hyderabad account for 60% of the total Global Capability Centres demand: Colliers

Between 2020-2022 period, GCCs accounted for 38–43% of the total leasing, housing over 1580 operating GCCs with a talent pool of 1.66 mn as of 2022.

The report noted that this number may go up during the 2023-2025 period. The GCCs will account for 35–40% of the total office leasing. Moreover, India has been a leader in the growth of GCCs, expected to host over 1,900 GCCs by 2025 with a professional talent pool that exceeds 2 mn.

Major global players in sectors like BFSI (Banking, Financial Services, and Insurance), technology, and engineering and Manufacturing (E&M) are anticipated to grow their GCC presence in India further, potentially exploring multi-functional centers. Established GCC occupants with long-term strategies may consider establishing large campuses in India’s key urban centers.

Also Read: Share of green office leasing touches 16% in 2022-2023; Global Capability Centres account for 76% of overall leases

“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 country is likely to witness more state-of-the-art GCCs going ahead,” said Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE.

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