GCCs to lease 45-50 msf of Grade A office space by 2025

21 Feb 2024 CW Team

?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. As Technology and BFSI sectors maintain their dominance, growing interest of occupiers from Engineering & manufacturing and Healthcare sectors promise to diversify the GCC landscape further. Moreover, GCCs are steadily adopting flex spaces, with approximately 5-10% of flex seats currently being utilized by GCC occupiers, indicating a shift towards more agile workspace solutions." says Arpit Mehrotra, Managing Director, Office Services, Colliers India.

ver the next two years, Global Capability Centers (GCCs) are expected to lease about 45-50 million square feet of office space, accounting for approximately 40% of the total office demand across the top 6 cities. Improved business sentiments and positive economic outlook is fostering heightened demand of office spaces in India, particularly signaling confidence among foreign origin companies seeking to establish their capability centers in the country. Interestingly, despite a weaker global outlook amidst pandemic and geopolitical tensions in the last 2-3 years, GCCs resumed their expansions in a steadfast manner, registering a 14% YoY rise in leasing activity in 2023. The second half of 2023 particularly witnessed the highest GCC leasing activity since 2020, reaching 12.4 million square feet, according to Colliers' latest report, titled Global Capability Centers in India: A newfound wave of confidence. The report highlights the pivotal role GCCs will continue to play in shaping India's commercial real estate landscape in near future. Driven by cost-effective offerings and a talent-rich environment, foreign companies will continue their expansions in India, further bolstering GCC demand in near to mid-term. ?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. As Technology and BFSI sectors maintain their dominance, growing interest of occupiers from Engineering & manufacturing and Healthcare sectors promise to diversify the GCC landscape further. Moreover, GCCs are steadily adopting flex spaces, with approximately 5-10% of flex seats currently being utilized by GCC occupiers, indicating a shift towards more agile workspace solutions. says Arpit Mehrotra, Managing Director, Office Services, Colliers India.