Offshoring Companies Dominate Office Leasing in India: Knight Frank Report

The latest report from Knight Frank has unveiled a significant trend in India's office leasing sector, shedding light on the growing influence of offshoring companies, particularly Global Capability Centres (GCCs). According to the report, GCCs have emerged as dominant players, securing an impressive 46 percent of the total office space leased in 2023. This marks a substantial shift in the market landscape, reflecting the evolving dynamics of India's commercial real estate sector.

The report's key findings reveal the remarkable growth of GCCs, with these offshoring firms leasing a staggering 27.3 million square feet of office space in 2023. This represents a notable 26 percent increase compared to the previous year, underscoring the growing reliance of offshoring companies on India as a preferred destination for setting up specialized captive units. The technology sector led the leasing activity, capturing the largest share of office space, followed closely by the industrials and banking, financial services, and insurance (BFSI) sectors. This diversification across industries indicates a broadening appeal of India's office market beyond traditional IT services.

Viral Desai, Senior Executive Director at Knight Frank India, highlighted the pivotal role of GCCs in driving office market demand. He emphasized that India has transitioned from being a cost-effective center to a value-adding captive center over the past decade. Desai projected continued growth for GCCs in India, estimating that the country could host up to 2,400 GCCs by 2030, with potential expansion to 2,880 by 2034.

The rise of offshoring is not limited to India alone; it is evident in other Asia-Pacific (APAC) hubs such as the Philippines, Malaysia, and Vietnam. This broader regional trend underscores the shifting dynamics of the office market, with offshoring companies playing a crucial role in driving growth and innovation. As businesses seek to optimize costs and tap into specialized talent pools, these APAC hubs are emerging as attractive destinations for setting up offshore operations.

Knight Frank's report provides valuable insights into the evolving landscape of India's office leasing market, with offshoring companies emerging as key drivers of demand. As India continues to attract a diverse range of industries, the role of GCCs is expected to become even more significant, shaping the future trajectory of the commercial real estate sector. With projections indicating further growth and regional implications extending to other APAC hubs, the offshoring trend is set to have far-reaching impacts on the global business landscape.