India expected to have 1,900 operational Global Capability Centres by 2025: Report
During January-June this year, GCCs continued aggressive expansion and accounted for a 38% share in overall office space take-up across six cities.
The total number of operational Global Capability Centres (GCCs) in India is expected to rise to 1,900 by 2025 and contribute 35-40% to the total office space, CBRE said in a report on Thursday.
Real estate consultant CBRE South Asia released its report 'India's Global Capability Centres-charting a new technology era' which elaborates on the growth of GCCs in India, leasing preferences, and key drivers for expansion.
"By 2025, it is estimated that there will be around 1,900 total operational GCCs in the country from existing around 1,580. During this period, GCC leasing activity is expected to account for 35-40% of the overall office leasing," the report said.
Among the top emerging GCC hubs, including Brazil, Chile, China, Czech Republic, Hungary, Philippines, and Poland, the report noted that India has the best cost and talent attractiveness score, which makes the country the most sought-after destination for GCCs.
During January-June this year, GCCs continued aggressive expansion and accounted for a 38% share in overall office space take-up across six cities.
Office leasing by GCCs in the first half of this year stood at 9.8 million square feet.
Cumulatively, Bengaluru, Chennai, and Hyderabad accounted for over 77% of the total GCC leasing during the January-June period.
Anshuman Magazine, Chairman and CEO of India, South-East Asia, Middle East and Africa, CBRE, said, "India has emerged as the most preferred destination for GCCs worldwide, and the growth of GCCs in India is a testament to the country's skilled talent, cost efficiency, favourable business environment, and government support."
Post the pandemic, global firms were nudged to re-evaluate their business offerings to increase digitisation levels, he added.
"In a bid to ensure business agility, improve efficiency and make their businesses resilient, a higher number of MNCs explored multi-functional GCCs in India. Gradually, mid and smaller-sized firms also started venturing into the Indian shores to enhance their offerings," Magazine said.
He noted that companies are also evaluating tier-II cities to set up their GCCs and expand their operations, encouraged by the availability of talent due to the reverse migration observed during the pandemic, led by remote and hybrid working models.
"While cost arbitrage in tier-II cities has always been an advantage towards emerging hubs, the recent thrust on infrastructure development in these cities has also added to the advantage of non-metro cities," Magazine said.
As per the report, GCCs are likely to lease office space of around 60-62 million square feet of office space between 2023-25.
Sectors, including technology, BFSI, and engineering & manufacturing will lead leasing activity while sectors such as life sciences, automobiles, and aviation will also expand their GCC operations in India.
North American firms continue to be the mainstay of GCCs in India.
Edited by Kanishk Singh