The total number of operational global capability centres (GCCs) in India is expected to jump over 20% from 1,580 currently to 1,900 by 2025. Real estate consultancy CBRE says in a report, adding that GCCs will likely lease 60-62 million square feet space between 2023 and 2025 in India.
The report "India's Global Capability Centres-charting a New Technology Era" says leasing activity will be driven by technology, BFSI, engineering and manufacturing sectors. Sectors such as life sciences, automotive, and aviation will also expand their GCC operations in India. Global corporations are demonstrating their long-term commitment to India by leasing larger premises, with ambitions to expand further in the future.
North American firms continue to be the mainstay of GCCs in India. Talent availability and cost, real estate, and a supportive regulatory environment are going to aid GCC's growth in India. “Post the pandemic, global firms were nudged to re-evaluate their business offerings to increase digitisation levels. In a bid to ensure business agility, improve efficiency and make their businesses resilient, a higher number of multi-national companies explored multi-functional GCCs in India. Gradually, mid, and smaller-sized firms also started venturing into the Indian shores to enhance their offerings,” says Anshuman Magazine, chairman and chief executive officer (India, South-East Africa, West Asia & Africa), CBRE.
Companies are also evaluating tier-II cities to set up GCCs and expand operations, encouraged by the availability of talent due to the reverse migration observed during the pandemic. "While cost arbitrage in tier-II cities has always been an advantage towards emerging hubs, the recent thrust on infrastructure development in these cities has also added to the advantage of non-metro cities," he adds.
The report underlines that by 2025, it is estimated that there will be 1,900 total operational GCCs in the country from existing 1,580. During this period, GCC leasing activity is expected to account for 35-40% of the overall office leasing. Globally, among the top emerging GCC hubs, including Brazil, Chile, China, Czech Republic, Hungary, Philippines, and Poland, India has the best cost and talent attractiveness score, which makes the country the most sought-after destination for GCCs.
The survey also predicts that the top six cities—Delhi, Bangalore, Mumbai, Chennai, Pune, Hyderabad—will likely have a robust pipeline of new developments in rising micro markets between 2023 and 2025, resulting in the creation of new hubs for activity. The planned projects will focus on providing GCCs with high-quality, investment-grade office supplies, allowing them to grow and upgrade as needed.
GCCs maintained their rapid growth during January and June of 23 and accounted for 38% of the total amount of office space occupied across six cities. In January–June of 23 alone, GCCs leased 9.8 million square feet of office space.
Ram Chandnani, managing director, Advisory & Transactions Services, CBRE India, says, “From a commercial real estate perspective, GCCs in India form a large occupier group and are often the first to adapt and innovate, setting a precedence for other occupier groups.” GCCs in India continue to adopt a hybrid workstyle, and they will likely continue to take up large office space to enhance collaboration and innovation which are key performance enablers for most GCCs, he adds.
