Bengaluru: Global Capability Centers (GCCs) in India have leased approximately 53 million square feet of office space in key Indian cities between 2022 and the first half of 2024, such as a highly skilled workforce, cost advantages, and favourable business conditions, according to CBRE and Zyoin’s latest report.
This growth is expected to continue, especially in India’s top six metropolitan areas like Bengaluru, Hyderabad, Chennai, Pune, Delhi-NCR, and Mumbai, due to factors which boast exceptional talent pools that are conducive to expansion and future development.
In the first half of 2024, office leasing activity in the GCC (Gulf Cooperation Council) region across six significant cities increased 8% year-on-year. During the same period, GCCs contributed to around 37% of India’s total office leasing activity.
The share of Banking, Financial Services, and Insurance (BFSI) GCCs rose to 22% in H1 CY 2024, attributed to significant leases from global banking and insurance firms in Mumbai, Bangalore, and Pune. Over the past two-and-a-half years (2022-H1 2024), technology companies have leased approximately 15 million square feet of office space. Technology and BFSI corporates have traditionally been the primary office space occupiers in the GCC region.
However, niche firms, including hedge funds and private equity firms, are expanding, recognising the strength of India’s talent. Engineering and manufacturing (E&M) companies are expanding their footprint in India, which is likely influenced by supply chain diversification strategies. The report mentioned that life sciences GCCs also exhibited an increased appetite for expansion in the country, driven by the need to digitalise services and foster product development.
Global corporations have transformed their captive centres in India from basic service providers to engines of innovation. Global Capability Centers (GCCs) are now driving digital transformation and product excellence, becoming an essential part of any forward-thinking global firm.A burgeoning array of industries is recognizing the potential of Indian talent, establishing their GCC footprint. India’s abundant tech and non-tech talent pool is increasingly becoming a global solution. The future promises further diversification as the life sciences, automobiles, and aerospace sectors expand their Indian GCC presence. With a strategic roadmap for 2024 GCC development, India is poised to spearhead the next wave of globalisation”, said Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE India.Bengaluru has cemented its status as the leader of global capability centres (GCCs). The city holds the largest share of GCC talent and boasts a two-million-strong technology workforce, the largest in India. Karnataka’s upcoming GCC policy is expected to catalyse GCC setups and job creation in the city. The city holds the largest share of GCC talent, accounting for 34% in H1 2024.
Pune, traditionally known for its dominance in the BFSI (Banking, Financial Services, and Insurance) sector in the GCC (Global Capability Center) space, is currently witnessing a surge in interest from engineering, manufacturing, and technology companies. The region’s competitive real estate costs, diverse talent pool, and strategic proximity to an automotive and engineering hub appeal to GCC occupiers. Pune secured the second-highest share in GCC leasing during the first half of 2024, mainly due to significant deals.
According to the joint report, Hyderabad’s rise to prominence in the Global Capability Centers (GCCs) landscape is attributed to the government’s proactive policy framework and efficient urban infrastructure. The city’s appeal to talent from across the nation is bolstered by its attractive value proposition for GCCs, including an improved quality of life and lower operational costs. Furthermore, Chennai has solidified its position as a key GCC hub, supported by a dynamic technology sector and a strong manufacturing base. Notably, Chennai accounted for 17% of total GCC leasing from 2023 to H1 2024, with 6 million sq. ft. of office space leased during this period. In addition to technology, engineering, and manufacturing, central global banks are active players in the city.
“The evolution of GCCs from operational back offices to technology and innovation hubs necessitates a profound workforce skill transformation. A surge in demand for digital and machine learning proficiencies, including AI, applied machine learning, data analytics, cybersecurity, blockchain, augmented reality app design, engineering, and UI/UX design, is evident.
By cultivating a highly skilled workforce and adopting innovative learning methods, GCCs In India can establish themselves as Global Centers of Excellence. India boasts a substantial engineering talent pool, enabling firms to expand across diverse roles. The emergence of AI and ML as pivotal technologies underscores the imperative for robust talent reskilling”, said Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India.
The report highlights that India’s global landscape, human capital, and real estate serve as the foundational pillars of GCC prosperity. Currently, approximately 1.66 million professionals are employed in GCCs across India, contributing to a vast and continually expanding talent pool. This abundance of skilled professionals positions India as an appealing destination for GCCs, especially considering that the average salary of software professionals in India is only one-tenth of the cost in the US for similar roles. Consequently, establishing a GCC in India offers significant cost competitiveness, leveraging the large and cost-effective tech workforce available in the country.
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