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The total number of operational Global Capability Centres (GCCs) in India is expected to jump over 20 per cent from 1,580 currently to 1,900 by 2025, real estate consultancy CBRE said in a report on Thursday. It said that between 2023 and 2025, GCCs will likely lease office space of around 60-62 million square feet (msf) in India.
In its "India's Global Capability Centres-charting a New Technology Era" report, CBRE said that the availability and cost of talent, real estate, and supporting regulatory framework have made India the most sought-after destination for GCCs. Due to this, global GCCs are leasing larger office spaces in the country.
"North American firms continue to be the mainstay of GCCs in India," it said.
The report also stated that between 2023-25, the top six cities, including Delhi, Bangalore, Mumbai, Chennai, Pune and Hyderabad, are likely to witness a strong pipeline of new developments in emerging micro markets. "The upcoming developments would be geared towards quality investment-grade office supply, giving GCCs ample scope to upgrade and scale as they expand," it added.
"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," said Anshuman Magazine, chairman and chief executive officer (India, South-East Africa, West Asia & Africa), CBRE.
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He further noted that companies are also evaluating tier-II cities to set up their GCCs and expand their 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 said.
In the first six months of 2023, office leasing by GCCs stood at 9.8 msf. Three cities, Bangalore, Chennai, and Hyderabad, cumulatively accounted for over 77 per cent of the total. Bangalore alone accounted for about 39 per cent of the market share.
The report also stated that by 2025, Delhi's Noida Expressway will be the most sought-after destination for GCCs. Navi Mumbai will be the hotspot in Mumbai, followed by North Bangalore.
In Chennai, the highest demand is expected to be recorded in OMR Zone 2. In Hyderabad and Pune, the places with high GCC office demand will be IT Corridor 2 and PBD North-East, respectively.
"We believe that the incremental growth over the next two to three years will continue to be across the top metro cities. From a workplace perspective, the health and well-being of employees will continue to be of paramount significance for GCCs, with offices built for a multi-generational workforce," said Ram Chandnani, managing director (Advisory & Transaction Services) at CBRE.
