Mar 12, 2024

How GCCs are Shaping the Indian Commercial Real Estate?

People and EngagementCommercial Real Estate

Global Capability Centres have long been a part of India’s success story. Over the last few years, the evolution of GCCs in India, from merely providing voice-based support in the early 2000s to driving innovation, excellence, and digital transformation, has been phenomenal. Leveraging a combination of favourable business conditions, including the presence of a skilled workforce, cost-effective solutions, and a dynamic business environment, GCCs have been mounting up their operations in India. 

On the other hand, the Indian office space market has become a powerhouse in the APAC region powered by advanced workspace solutions and unique offerings. A recent report from Colliers revealed that GCCs are expected to lease 45-50 million square feet of Grade A office space in India by 2025. With the continuous progression of global entities and the corresponding transformation of workspaces, it is evident that both GCCs and the Indian office market will continue complementing each other in the longer run. 

Positioned as pioneers in adopting and driving innovation, these large offshore organisations will play a prominent role in shaping the country's CRE sector dynamics. Moving further, we will understand the role of GCCs in elevating the demand for flexible and managed office spaces in India. 

Regaining the Lost Momentum

Since 2020, a series of global uncertainties caused a deceleration of leasing activity in India. But Colliers recently unveiled the steady bounce-back of GCCs in 2023. With an uninterrupted economic development, the second half of 2023 witnessed the peak leasing at 12.4 million square feet, the highest since 2020. About half of the large-sized (>100,000 sq ft) deals were locked by GCCs, and there was also a 14% YoY leasing rise in 2023.  

This spike clearly indicates that large offshore organisations are gradually expanding their footprints in India. Powered by cost-effectiveness, prime locations, and advanced workspace solutions, GCC leasing is expected to rise as global companies focus on return-to-offices and R&D activities. 

Technology Continues to Lead, with BFSI and Engineering & Manufacturing Gaining Momentum

India has constantly proven to be a dynamic market, offering abundant opportunities for global organisations to expand and scale their operations. From 2020 to 2023, GCC’s total leasing for Grade-A offices stood at approx. 72 million square feet. Out of this, 45% of the space take-up is from the Technology sector, whereas BFSI and Engineering & manufacturing have emerged as significant contributors, with 18% and 17% of leasing, respectively. Compared to 2020, there has been a 4X surge in BFSI and a 1.6X increase in Engineering & manufacturing leasing in 2023.  

Also Read: Coworking is the Fastest Growing Segment in Commercial Real Estate

India’s advantageous position further stands out in terms of both economic viability and skilled workforce. The same report also suggested that 71% of the demand from GCCs during the 2020-23 period was driven from US-origin firms. The robust IT infrastructure, coupled with conducive regulatory and advanced workspace solutions is also attracting Europe and APAC-based MNCs to set up their R&D/Innovation centres.

SBDs Dominating the Office Space Demand

While expanding their operations in India, GCCs are equally determined to prioritise and elevate the employee experience as well. SBDs (Secondary Business Districts) have become a prime alternative for global enterprises to establish and expand their presence in India. These offshore enterprises prefer having their offices in such locations that are in the vicinity of the residences of their employees. Throughout 2020-23, SBDs accounted for nearly two-thirds (66%) of the demand for office space by the GCCs. 

The focus for GCCs extended beyond workforce satisfaction, encompassing a desire for premium developments, which ultimately brought SBDs into play. Today, Technology, BFSI, Engineering & manufacturing, and E-Commerce are aligned in their conviction that SBDs stand out as an optimal choice for GCCs, meeting their unique and specific requirement criteria.

Flexibility and Sustainability at the Forefront

In the next couple of years, GCCs will contribute about 40% of the total demand for office spaces. As they look forward to operating in a collaborative business ecosystem, the demand for fully furnished flexible and shared office space will increase. This trend is driven by the desire for hybrid and hub-and-spoke work models that allow greater flexibility to the workforce and escalate the company’s real estate portfolio.  

Also Read: Flex Sector Leading the Transformation in CRE Market Dynamics

Currently, GCCs hold 5-10% of flex seats in India, and the utilisation of flexible workspaces by Tech companies is more pronounced, spanning a range of 10% to 15%. These global entities are highly interested in expanding their footprints in tech-driven cities, including Bangalore, Hyderabad, and Pune, and surprisingly, these 3 cities have the highest flex stock penetration in India. 


Recently, Mr. Harsh Binani, our co-founder, took center stage on The Core podcast, shedding light on the pivotal role of Global Capability Centres in surging the demand for managed and flexible workspaces. He revealed that these Forbes 2000 companies are moving their operations to India and are driving at least 25% of Smartworks incremental demand. He believes that the transformation of the Indian CRE segment, driven by GCCs, is a testament to its resilience and adaptability, and will continue playing a pivotal role in steering this evolution.

Schedule a Visit
Smartworks-logo Call