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Bengaluru: When it comes to housing global capacity centres (GCCs), India has only gotten started, with about 70 per cent of the Fortune 500 companies yet to set up shop in the country for this segment. This only goes to show the vast untapped potential the sector holds yet.
Global firms accounted for over a third (36 per cent) of total office space demand in India’s top seven markets in 2024. GCCs leased 27.7 million square feet (msf) in 2024, according to an analysis by commercial real estate and investment management company JLL out on Wednesday. This marks a 15.2 per cent year-on-year (YoY) increase.
The number of GCC units is expected to exceed 2,500 in the next three to four years, potentially occupying over 300 msf of office space. As of December 2024, there are 1,950 GCC units in India.
In the past nine years, 180.9 msf have been leased by GCCs, accounting for 40 per cent of office gross leasing.
Overall, office leasing activity in the top seven cities was at a record 77.2 msf in 2024. This marks a 22.6 per cent YoY increase from 2023’s historic high of 63 msf. Driving this growth were GCCs.
Touted as the world’s GCC capital, Bengaluru expectedly remained the premier GCC hub, capturing 47 per cent of total GCC leasing demand in 2024 or 26.9 msf in the 2022-24 period. Second ranked Hyderabad (at 11.9 msf).
Yet, the city showing the strongest growth in the past three years is Chennai, going from 3.7 msf in 2017-2019 to 10.5 msf in 2022-24.
While tech occupiers have historically dominated GCC leasing activity (at 44 per cent), industrial and manufacturing (from 12 per cent to 25 per cent) and banking, financial services, and insurance (BFSI, from 15 per cent to 21 per cent) are segments that have shown a rapid pace of growth from the pre-Covid three-year period.
Beyond these sectors, healthcare and biotech have been growing, indicative of India’s strong push in these sectors.
Overall, these trends are due to India’s large tech talent pool, and relatively lower costs in both human capital and real estate.