Global capability centres may lease about 45-50 m sq ft space in next 2 years: Colliers report.
Bengaluru: Global Capability Centres (GCCs) are expected to to lea se about 45-50 million square feet of office space over the next two years accounting for approximately 40% of the total office demand across the top 6 cities, said Colliers in a report.
The demand is mainly led by Improved business sentiments and a positive economic outlook, signalling confidence among fore- ignorigin companies seeking to establish their capability centres in the country
In the last two years, companies like Amazon, Bank of America, Wells Fargo, Qualcomm, and Go- ogle have established large GCCs in the country
“With heightened GCC activity and sustained domestic demand, the outlook for India’s office market is indeed optimistic. Drawing confidence from India’s economic resilience, GCCs have swiftly resumed leasing activities,” the report said.
As technology and BFSI sectors maintain dominance, the growing interest of occupiers from the engineering & manufacturing, and healthcare sectors pro- mises to diversify the GCC lands- cape further,” said Arpit Mehrotra, Managing Director, Office Ser- vices, Colliers India.
The continued interest from the US, EU and other regions solidifies India’s position as a preferred GCC destination, driven by the availability of a skilled workforce at affordable costs, real estate cost arbitrage, and improving the regulatory framework, the report noted.
“Driven by global quality real estate available at a fraction of developed market costs coupled with a talent-rich environment also available at a fraction of developed market costs, foreign companies will continue to expand across technology, BFSI, and pharmasegments,” said Sriram Khattar, vice chairman and managing director of DLF Rental Business.
GCCS are steadily adopting flex spaces, with approximately 5-10% of flex seats currently being utilised by GCC occupiers, indicating shift towards more agile workspace solutions.
“The demand for flexible office space is expected to shoot up by tech companies in 2024, with many loo- king to set up global capacity cent- res under a flexible model. We are looking to focus on a managed office space model with the return to office gaining momentum,” said Shesh Rao Paplikar, founder and CEO of BHIVE Group.
Southern cities like Bengaluru, Hyderabad, and Chennai have be- come key GCC hubs, with Bengaluru and Hyderabad leading GCC leasing activity with a cumulative share of 60% from 2020 to 2023. Chennai saw a notable 2.4X surge in 2023, while Pune and Mumbai witnessed over 1.7X growth com- pared to 2022.
Currently, India houses close to 1,900 GCCs and is counted among the fastest-growing GCC markets in the world.
“Sub and near-dollar micro markets remain pivotal for GCC space uptake in India, contributing nearly 80% of the leasing activity. With two-thirds of the demand concentrated in quality assets across respective suburban business districts across major cities, GCC occupiers tend to give equal consideration to rental affordability and high-quality infrastructure,” said Vimal Nadar, Senior Director and Head of Research Colliers India.
“Looking ahead, SBDs will remain GCC epicentres for their proximity to talent pools and business hubs, while PBDs will witness in- creased interest, especially from non-tech sectors. Improved business sentiments and the positive economic outlook are likely to drive heightened demand for office spaces, including GCCs in the country,” he said.
Source- The Economic Times
