GCCs Accelerate India's Office Space Leasing in FY24

GCCs Drive 17% Growth in India's Office Space Leasing, Reaching 22.5 Million Sq Ft in FY24

1. Significant Increase in Space Take-Up - 17% YoY Growth in Office Space Leasing

In FY24, Global Capability Centres (GCCs), the offshore units of multinational corporations, have seen a significant increase in office space leasing, growing by 17% year-on-year (YoY) to reach 22.5 million square feet, compared to 19.2 million square feet in FY23. This surge is largely driven by the engineering, manufacturing, BFSI, and technology sectors, according to CBRE.

2. GCCs: Catalysts for Change in the Office Sector - Impact on India's Office Leasing Market

GCCs have played a crucial role in transforming the Indian office sector. With a talent pool of 1.3 million as of 2019, GCCs accounted for 30–35% of total office leasing in India from 2017 to 2019, with over 1,250 operational GCCs during that period.

3. Projections for Future Leasing - Expectations for 2024-2025

Projections suggest that GCCs will lease between 40-45 million square feet from 2024 to 2025. India's focus on digital technology, coupled with competitive costs for talent and rentals, continues to drive this growth, as highlighted by Anshuman Magazine, Chairman & CEO-India, Southeast Asia, Middle East & Africa, CBRE.

4. Historical Leasing Trends - Leasing from 2020-2022

During 2020-2022, GCCs accounted for 38–43% of total office leasing, with over 1,580 operational GCCs and a talent pool of 1.66 million as of 2022. For 2023-2025, it is expected that GCCs will contribute 35–40% of the total office leasing.

5. Growth of GCCs in India - Leadership in GCC Growth

India leads in the growth of GCCs, expected to host over 1,900 GCCs by 2025, with a professional talent pool exceeding 2 million. This growth is driven by the expanding presence of GCCs in various sectors.

6. Emerging Growth Opportunities - Flexible Workspaces and Diverse Sectors

Growth opportunities are anticipated from flexible workspace providers, research, consulting, analytics firms, and life sciences companies, reflecting the diverse sectors contributing to India's office market expansion, as noted by Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India.

7. India's Competitive Edge - Abundant Talent and Competitive Costs

With an estimated 5.4 million tech experts, India offers GCCs a rich talent pool for innovation and growth. Additionally, India's competitive cost structure for talent, rentals, and operational expenses makes it an attractive destination for businesses looking to optimize costs while maintaining high standards.

8. Expansion Initiatives by Global Players - Increased Presence of Major Sectors

Established companies, driven by their success in India, are pursuing expansion initiatives. Key global players in BFSI, technology, and engineering and manufacturing sectors are expected to further expand their GCC presence, potentially exploring multi-functional centers.

Summary Table of Data

Fiscal Year Total Office Space Leased by GCCs (million sq ft) YoY Growth (%) Number of Operational GCCs Talent Pool (millions)FY23 19.2 - - -FY24 22.5 17% - -2020-2022 - - 1,580 1.662023-2025 35-40% of total leasing - 1,900 (expected by 2025) 2+ (expected by 2025)

Conclusion:

The growth of GCCs in India significantly influences the office leasing market, driven by the competitive advantages of talent availability and cost efficiency. As GCCs expand their presence across various sectors, they continue to shape the future of India's commercial real estate landscape.