Thriving Economy: Global Capability Centres Propel Real Estate Growth in India

Synopsis

As global capability centres (GCCs) thrive in India, real estate absorption rates have surged past pre-Covid levels. In 2024, GCCs are projected to occupy substantial commercial spaces, indicating strong demand driven by a skilled workforce and favorable costs. This trend is reshaping the Indian office market landscape as companies adapt to evolving workplace strategies.

Key Takeaways

GCCs lead real estate absorption in India.
In 2024, GCCs committed to 27.7 million sq ft of grade A space.
Strong demand from technology sector and GCCs.
Positive growth expected in the Indian office market by 2025.
Hybrid work models are influencing office space designs.

New Delhi, March 22 (NationPress) Fueled by the nation's talented workforce and advantageous operational costs, global capability centres (GCCs) are at the forefront of real estate growth in India, surpassing pre-Covid levels amid a thriving economy.

In 2024, GCCs have committed to approximately 27.7 million square feet (sq ft) of grade A commercial real estate, and 24.1 million sq ft in 2023, accounting for 36 percent and 38 percent of total real estate absorption, respectively, as per JLL.

Conversely, a recent office market evaluation by real estate consultancy Knight Frank India revealed that GCCs leased 22.5 million square feet (mn sq ft) in 2024, representing 31 percent of overall leasing volumes.

Among these, 50 significant transactions (over 100,000 sq ft each) totaled 12.1 mn sq ft, while 56 mid-sized deals (50,000-100,000 sq ft) contributed 4.4 mn sq ft. Additionally, 223 smaller agreements (under 50,000 sq ft) accounted for 5.5 mn sq ft of leased area, the report indicated.

The net office absorption across the top seven cities reached nearly 50 million sq ft in 2024, showing a remarkable 29 percent year-on-year growth from 38.64 million sq ft in 2023. This surge was predominantly fueled by strong demand from GCCs and the technology sector, according to another report by Anarock Group.

India's standing as a top choice for GCCs plays a critical role in driving office space absorption.

Major multinational companies are strategically increasing their operational footprint, attracted by the country’s skilled workforce and cost efficiencies.

This trend is anticipated to create significant demand for Grade A office spaces in key markets such as Bengaluru, Hyderabad, NCR, MMR, and Pune.

The evolution of workplace strategies continues to reshape market dynamics. While hybrid work models remain common, organizations are rethinking their office environments to foster collaboration, innovation, and employee well-being, according to the Anarock report.

The Indian office market is set to experience positive growth in 2025, driven by numerous favorable factors influencing the commercial real estate sector. The steady recovery of global economies, particularly within the technology industry, is expected to renew demand for office spaces across India’s top seven cities.