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In India, there's a big change in office space demand as Global Capability Centres (GCCs), which are in-house tech and service branches of multinational companies (MNCs), are now leading. Colliers, a real estate management firm, reports that GCCs leased the most office space in 2023 since the pandemic started.
Before the pandemic, IT firms were the dominant players in India's commercial real estate market. However, Colliers data shows a clear change. While office space leased by GCCs dipped slightly in 2021 (15 million sq. ft) compared to 2020 (17 million sq. ft), it has risen steadily since. In 2022, this figure reached 19 million sq. ft, and in 2023, it surged to a record 21.1 million sq. ft. This represents a staggering 37% of all office space leased in India last year (total: 58 million sq. ft). Experts predict this trend to continue, with GCCs potentially occupying a significant portion of the market, reaching 40% in the next two years.
This rise in GCC activity reflects India's growing importance as a global business hub. With over 1,600 GCCs already established in the country, these centers are creating a significant number of white-collar jobs. GCCs are now surpassing traditional IT firms as the biggest hirers of such professionals.
Reports from Cushman & Wakefield and Knight Frank further solidify this trend. They identify GCCs as a major driver of commercial real estate growth in recent years, with Cushman & Wakefield highlighting that growth was largely driven by GCCs. Knight Frank, in its recent report, states that over 80 new GCCs were established or expanded in India during the year 2023 alone. Notably, Knight Frank highlights that GCCs were the only segment in the commercial space to witness growth in 2023.
While traditionally GCCs have preferred dedicated office spaces, there's a shift towards embracing flexible work options. Colliers report that 5-10% of the total flex space market in India, which amounts to millions of square feet, is now occupied by GCCs. This indicates an evolving workspace strategy for these business centers.
Looking ahead, India's commercial real estate market seems poised for continued growth fuelled by the expansion of Global Capability Centres. This trend signifies a growing confidence in India's talent pool and its position as a key player in the global business landscape.
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