GCCs Drive Office Realty

Global Capability Centres (GCCs) have emerged as major growth drivers, transforming the office real estate market in India.

According to Knight Frank- 3AI   report,  ‘Global Capability Centres and India Office Market Landscape’, the office absorption by Global Capability Centres (GCC) is estimated to reach 26 mn sq ft by 2027 up from 19.69 mn sq ft in 2023.  Transaction activities have increased by 16% from 16.99 mn sq ft in 2018 with GCCs completing 6,667 office leasing deals across eight major cities between 2018 and 2023. The growth of GCCs highlights India’s potential to enhance processes and drive business innovation.

IT/ITeS sector GCCs lead the chart followed by BFSI and Consulting GCCs. For BFSI, Mumbai leads with the highest percentage of GCCs under the BFSI sector and Bengaluru leads with the highest percentage of GCCs in the IT/ITeS sector.

Around 80% of the GCCs in India are currently servicing international facing clients

Source: Knight Frank Research

“India’s GDP growth continues to be the fastest among major economies in the world, attracting attention for its strong infrastructure, and a consistent influx of top-tier talent and corporate entities. In the dynamic landscape of global business, India’s Global Capability Centres (GCCs) have evolved beyond traditional roles to become pivotal hubs of global strategy and local ingenuity. As India solidifies its position as a cornerstone of global GCC networks, these centres emerge as unparalleled hubs of creativity and collaboration., says Shishir Baijal, Chairman & Managing Director, Knight Frank India ”

Sameer Dhanrajani, CEO, of 3AI, said, “The future of GCCs in India is promising, with projections showing over 1,900 centres by 2025.  Emphasis will be on integrating advanced technologies, driving innovation, and fostering sustainability. GCCs are expected to play critical roles in global operations, particularly in generative AI, customer-centric business development, and as-a-service transformations. By 2030, they will undergo significant transformation, becoming integral parts of global organizations. India centres will be led by leaders focused on innovating new products and services, shifting from their current form to essential drivers of business success.”

 Office configuration deals

Between 2018 and 2023, around 5,349 GCC-focused office deals were finalised under 50,000 sq ft across the 8 cities.; 790 GCC deals took place between 50,000 and 100,000 sq ft, which can be marked as the medium segment. Around 528 GCC deals of above 100,000 sq ft were the largest deals signed between 2018 and 2023.

Source: Knight Frank Research 

Rahil Gibran, National Director, Occupier Strategy and Solutions, Bengaluru, Knight Frank India says, “India’s GCC market is expected to grow unabated over the next few years. Currently with over 1600 GCCs in the country, the development of new GCCs specially catering to the manufacturing sector has increased on a year-on-year basis and the talent landscape mainly in the technology sector has evolved over the years to meet the growing demand of new GCCs hence helping the growth of GCC in India.”

 Hybrid model is the most preferred and viable operating model for GCCs in India

The current global operating model primarily balances roles based on location. The new distributed model incorporates centralized work-from-home strategies to minimize costs while maintaining risk and effectiveness. Migration of roles within this new model can achieve higher savings and lower costs effectively. From the model chart, the hybrid model gives the maximum benefit for a GCC in India.

India remains a key hub for GCCs, alongside other destinations such as the US, Latin America, China, Europe, and the APAC region. India, the US, and China stand out for their ease of hiring talent. Conversely, India and the APAC region are noted for lower operational costs compared to global averages. Therefore, multinational corporations worldwide, increasingly view India as a preferred destination for establishing or expanding operations, with US companies at the forefront of this trend.