Global capability centres and third-party IT service providers lease over 46% of office space in India
By 2030, there will be an estimated 2,400 GCCs across India as it emerges as a global technology and services hub, a report by Knight Frank has saidin
Global firms outsourcing jobs to India have become a major occupier of office space in India with global capability centres and third-party IT service providers contributing to over 46% of office leasing in 2023, a report by Knight Frank titled Asia Pacific Horizon: Harnessing the Potential of Offshoring, has said.
India’s offshoring market witnessed an overall leasing volume of 27.3 mn sq ft in the calendar year 2023 with cumulative transaction volumes from GCCs accounting for 20.8 mn sq ft and third-party IT services accounting for 6.5 mn sq ft, making it a significant increase of 26% from the previous year.
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The GCC landscape in India has grown significantly by fostering more than 1,580 centres across the country in 2023. The GCC’s proposition in the Indian leasing transactions has increased from 25% in 2022 to 35% in 2023, it said.
Though information technology remains the biggest GCC occupier in the country, the growth was significantly propelled by GCCs from the industrial sector, particularly in the semiconductor, automobile, and pharmaceutical industries. These GCCs secured large spaces to capitalise on unique growth opportunities and align with the momentum of these industries globally, it said.
“Over the past decade, India has transformed itself from a cost-effective centre into a value-adding captive centre. By aligning itself with evolving needs of global businesses, India is now an established centre of excellence. The growing share of Global Capability Centres (GCC) in total leases will remain supportive of office market demand in 2024,” said Viral Desai, Senior Executive Director, Occupier Strategy & Solutions, Industrial & Logistics, Capital Markets and Retail Agency Knight Frank India.
It is projected that GCCs will potentially drive the office market in the next decade. By 2030, there will be an estimated 2,400 GCCs across India as it emerges as a global technology and services hub. Assuming a similar pace of growth, the number of GCCs in India may scale up to 2880 by 2034, it said.
Offshoring emerges as crucial catalyst for surging office demand
Global companies increasingly seek cost-effective solutions to minimise expenses, and a growing number are now looking towards offshoring functions as a strategic avenue. Offshoring has emerged as a critical driver propelling office demand in four APAC hubs – India, Philippines, Malaysia and Vietnam.
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Indian IT service exports are expected to expand from $185.5 billion in 2023 to $ 230.5 billion in 2025. The current pace of additional commercial assets supply will expand Indian office market stock to an estimated one billion square feet by 2025, it said.
India is expected to achieve the one billion sq ft mark in office stock by 2025, mainly catapulted by GCCs, the report added.
