Offshoring companies lead office leasing in India: Knight Frank report

O shoring companies, led by Global Capability Centres (GCCs), have leased over 46 per cent of the o ce space in India with an overall leasing volume of 27.3 million sq ft in 2023, and a growth of 26 per cent on year, according to a report by Knight Frank.

GCCs that are mushrooming in India have accounted for a significant chunk of this leasing, being the biggest o shore occupiers. Of the total, GCCs leased 20.8 million sq ft, the report said. GCCs share in o ce leasing increased to 35 per cent in 2023 from 25 per cent, a year ago.

GCCs are specialised captive units set up by global companies where they carry out specialised functions ranging from research and innovation to o ering a gamut of services including accounting and legal to their operations worldwide.

IT SECTOR

While the information technology sector has the most number of GCCs, over the last one year other sectors such as financial services, automobiles, healthcare have also set up GCCs in India.

The technology sector leased 11 million sq ft space, followed by industrials and BFSI at 5.6 million sq ft each. “The growing share of GCCs in total leases will remain supportive of o ce market demand in 2024,” said Viral Desai, Senior Executive Director, Occupier Strategy & Solutions, Industrial & Logistics, Capital Markets and Retail Agency, Knight Frank India.

He pointed out that over the past decade, India has transformed itself from a cost-e ective centre into a value-adding captive centre.

“By 2030, there will be an estimated 2,400 GCCs across India as it emerges as a global technology and services hub. Assuming a similar pace of growth, the number of GCCs in India may scale up to 2,880 by 2034,” he added.

O shoring has emerged as a critical driver propelling office demand in the four APAC hubs of India, Philippines, Malaysia and Vietnam.