Leasing by Global Capability Centres in India Increases by 17% in FY 2023-24: CBRE Report

Leasing by Global Capability Centres (GCCs) in India has seen a notable increase, rising by 17% year-over-year (YoY) in the fiscal year 2023-24, as reported by CBRE. The total leased space reached 22.5 million square feet, up from 19.2 million square feet in the previous fiscal year. This growth has been primarily driven by key sectors such as engineering and manufacturing, banking, financial services, and insurance (BFSI), as well as the technology sector.

Bengaluru Leads in GCC Leasing

Bengaluru has emerged as the top city for GCC leasing, accounting for 60% of the total space leased by GCCs in India. Hyderabad follows with a 26% share, while Delhi holds 9%. Other significant contributions come from Mumbai at 4% and Pune at 1%. In the January-March 2024 period alone, GCCs leased around 29% of the total office space leased in India, amounting to 4.2 million square feet.

Key Drivers and Sectoral Contributions

The rise in leasing activities by GCCs is attributed to several factors. The engineering and manufacturing sectors were particularly significant, with automobile companies also playing a vital role. The strategic emphasis on digital technology and the competitive costs for talent and rentals in India have made the country an attractive destination for setting up and expanding GCCs. 

Historical and Projected Growth

GCCs have been a significant part of the Indian office sector for several years. In the period from 2017 to 2019, GCCs accounted for 30-35% of total office leasing in India, with over 1,250 operational GCCs employing approximately 1.3 million professionals as of 2019. This trend continued, with GCCs representing 38-43% of total leasing between 2020 and 2022, by which time the number of operational GCCs had increased to over 1,580, employing 1.66 million professionals.

The projection for the period between 2023 and 2025 is optimistic, with expectations that GCCs will account for 35-40% of total office leasing. India is expected to host over 1,900 GCCs by 2025, with a professional talent pool exceeding 2 million.

Strategic Benefits and Future Projections

Major global players in BFSI, technology, and engineering and manufacturing sectors are anticipated to further expand their GCC presence in India. These companies are likely to explore multi-functional centres, establishing large campuses in key urban centers to support long-term strategic goals.

According to Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa at CBRE, projections indicate that significant leasing by GCCs could reach 40-45 million square feet between 2024 and 2025. This growth is facilitated by India's strategic emphasis on digital technology, combined with its competitive costs for talent and rentals.

Conclusion

The increase in leasing activities by Global Capability Centres in India reflects the country's growing importance as a hub for back-office operations, support functions, and IT support for global companies. The continued growth in this sector is likely to have significant implications for the Indian real estate market, particularly in major urban centers like Bengaluru, Hyderabad, and Delhi.

With the country's favorable business environment and strategic advantages, India is well-positioned to continue attracting and expanding GCCs, thereby driving further growth in the office leasing sector and contributing to the overall economy. As GCCs become more integral to global business operations, their role as catalysts for change in the Indian office sector will likely become even more pronounced in the coming years.