by THO
Bengaluru accounts for the highest office space absorption by global capability centers (GCCs) in India at 4.3 million square feet, according to a Knight Frank India – 3AI report released on July 26. Additionally, the total office space take up by GCCs in the country is estimated to reach 26 million square feet by 2027, up from 19.69 million square feet in 2023, per the report.
Bengaluru is the top choice for platform engineering and constitutes the highest IT/ITeS GCC led office absorption across eight markets in the country, the report noted.
Sectorally, within GCC focused transactions, IT/ITeS accounted for 53% of the overall office absorption in Bengaluru’s commercial market, the report highlighted. The other key contributors being manufacturing at 14%, BFSI at 12% and healthcare at 5%.
GCCs, also known as global in-house centres or captives, are offshore units of large multinationals performing technology operations.
Also Read: Leasing by Global Capability Centres in India increases by 17%; touches 22.5 mn sq ft in FY 2023-24
As per data cited in the report, between 2018-2023, Bengaluru witnessed a total of 1,368 office deals by GCCs, 983 of which fell in the under 50,000 sq ft bracket. Meanwhile 206 deals were between 50,000 – 1 lakh sq ft and about 179 deals were recorded in space above 1 lakh sq ft. The weighted average rent of Bengaluru stands at ₹67 per square feet as of 2023, per the report.
“The future of GCCs in India is promising, with projections showing over 1,900 centers by 2025, employing around 2 million people,” said Sameer Dhanrajani, CEO, 3AI.
Pan India picture
Between 2018-2023, transaction activity grew 16% with GCCs completing 6,667 office leasing deals across eight major cities, the report highlighted.
It credited the ease of hiring talent and lower operational costs in India, compared to global averages, for the feat.
“India’s GCC market is expected to grow unabated over the next few years and already witnessed a high momentum with the current number of GCCs standing at around 1,600 plus in the country,” said Rahil Gibran, National Director, Occupier Strategy and Solutions, Bengaluru, Knight Frank India.
Between 2018 and 2023, around 5,349 GCC focused office deals were finalized under the 50,000 sq ft metric across the top eight cities, the report said. In this, 790 deals took place between 50,000 and 100,000 sq ft, which can be marked as the medium segment. Meanwhile, around 528 deals of above 1 lakh sq ft were the largest deals signed during the five-year period.
