“India’s Bengaluru and Hyderabad Lead Global Capability Centre Surge: Colliers Report”
In a testament to India’s burgeoning stature as a global technology and business hub, cities like Bengaluru and Hyderabad have emerged as pivotal players in the demand for Global Capability Centres (GCCs), according to a recent report by Colliers. These centers, which are offshore units of large multinationals performing technology operations, are increasingly choosing Southern cities like Bengaluru, Hyderabad, and Chennai as their preferred locations, with Bengaluru and Hyderabad collectively accounting for a significant 60% share of GCC leasing activity from 2020 to 2023.
In a testament to India’s burgeoning stature as a global technology and business hub, cities like Bengaluru and Hyderabad have emerged as pivotal players in the demand for Global Capability Centres (GCCs), according to a recent report by Colliers. These centers, which are offshore units of large multinationals performing technology operations, are increasingly choosing Southern cities like Bengaluru, Hyderabad, and Chennai as their preferred locations, with Bengaluru and Hyderabad collectively accounting for a significant 60% share of GCC leasing activity from 2020 to 2023.
The report underscores the growing significance of GCCs in shaping India’s commercial real estate landscape, with projections indicating that GCCs are set to lease between 45-50 million square feet of Grade A office space by 2025. This represents approximately 40% of the total office demand across India’s top 6 cities: Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune.
Despite global uncertainties stemming from the pandemic and geopolitical tensions, GCCs have exhibited resilience and confidence in India’s market, with a notable 14% year-on-year increase in leasing activity in 2023. This resurgence is attributed to improved business sentiments and a positive economic outlook, particularly among foreign companies seeking to establish their presence in India.
While the technology sector continues to dominate GCC leasing activity, there has been a notable diversification with sectors such as Banking, Financial Services, and Insurance (BFSI), as well as engineering and manufacturing, witnessing significant traction in recent years. In 2023 alone, the BFSI sector experienced a remarkable four-fold increase in leasing activity within GCCs.
Arpit Mehrotra, Managing Director of Office Services at Colliers India, highlighted the pivotal role of GCCs in India’s office market: “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, and are poised to play a pivotal role, contributing to over 40% of the total office demand in the next 1-2 years.”
Furthermore, the report indicates that sub or near dollar markets, such as Noida Expressway in Delhi-NCR and Navi Mumbai, are driving nearly 80% of overall GCC leasing activity in India. These markets offer competitive office rentals compared to the average rates in major cities, making them attractive destinations for GCC expansions.
As India’s office market continues to evolve, fueled by the robust growth of GCCs and sectoral diversification, the country stands poised to solidify its position as a leading destination for global business operations and technological innovation.
Sources By Agencies
About The Author
