The landscape of office space is set for a major shift as global capability centres (GCCs), driven by technology, BFSI, and engineering sectors, are projected to lease a whopping 62 million square feet between 2023-2025. India, holding 50% of the global GCC segment, is at the forefront of this surge. A recent CBRE report sheds light on the trends shaping the future of office leasing.
Unlocking the Potential:
The report by CBRE highlights the surge in demand for office spaces by global capability centres, offshore arms of multinational corporations providing crucial support services. India plays a pivotal role, holding a commanding 50% share in the global GCC segment. The sectors fueling this demand include technology, banking, financial services, insurance, engineering, and manufacturing.
Growth Projections and Operational GCCs:
By 2025, the operational GCCs in India are expected to rise from the current 1,580 to an estimated 1,900, constituting 35-40% of overall office leasing in the country. The report foresees continued growth concentrated in the top metro cities, driven by the availability of talent, cost-effectiveness, and a supportive regulatory environment.
Tech Industry’s Steady Momentum:
While the Indian IT industry faces challenges, GCCs emerge as a resilient force, maintaining momentum in the tech sector. The report attributes this resilience to factors such as the availability and cost of talent, real estate advantages, and a supportive regulatory framework. India’s superior cost and talent attractiveness score solidify its position as the preferred destination for GCCs.
Diversification into Emerging Sectors:
Beyond traditional sectors, emerging industries like life sciences, automobile, and aviation are poised to contribute to the growth of GCCs. The report identifies these sectors as catalysts for the anticipated trajectory of expansion in the coming years.
City-wise Insights:
- Bengaluru Leads the Pack: Bengaluru emerges as the leader, securing a 39% share in overall leasing by GCCs during the first half of 2023. Key micro markets such as Outer Ring Road and Whitefield played pivotal roles in this growth.
- Chennai and Hyderabad’s Contributions: Chennai holds a 24% share, securing the second position, while Hyderabad stands third with a 14% contribution to overall leased space during H1 2023.
- Pune’s Growing Significance: Pune is carving a niche as a GCC hub, witnessing a remarkable 57% increase in leased space between January and June 2023 compared to the same period last year.
Riding the Talent Wave:
The reverse migration observed during the pandemic, along with the rise of remote and hybrid working models, is enticing companies to explore tier-II cities for setting up GCCs. Anshuman Magazine, Chairman, and CEO for India, South-East Asia, Middle East, and Africa at CBRE, notes the encouraging trend of companies expanding their operations to leverage the talent pool in tier-II cities.
