Global

Capability
Centers in
India
A newfound wave of confidence

February 2024
India’s office space demand: Scaling up
India office demand
Evolving role of GCCs in India’s office landscape continues to rise

Domestic companies
firm up overall
Over the years, the India office market has awakened from its Average annual gross leasing (in msf) in leasing volumes

58
humble beginnings of early 2000s and established itself as a Grade A office spaces
powerhouse in the APAC region. All throughout this journey, the
demand base has slowly but steadily diversified. GCCs have

50
IT-ITes having significant share Slowdown in office
always played a significant role in the demand of Grade A office in office leasing space take-up amidst
spaces in the country. Initially starting as a support provider, pandemic and
global economic
GCCs in India have continuously scaled up their offerings. As volatility

40
the domestic economic growth story found its footing in the
second half of the last decade, home-grown companies from
diverse sectors including technology, financial services,
engineering & manufacturing started to play a more

30 30
prominent role in office leasing activity. Flexible spaces too
grew from strength to strength. As the new decade started,
back-to-back global blackswan events in the form of Covid-19
pandemic and cross border tensions meant GCCs adopting a
wait and watch policy for their India expansion plans. However,
as India continues to reassure global investors with its inherent
strengths, GCCs seem to have regained their comfort levels
about the India growth story. Large sized deals have become
more prevalent. 2022 and 2023 have been consecutive years
2010-2017 2018-2019 2020-2021 2022 2023
of record-breaking office leasing activity. The momentum is
expected to continue further as the demand base for India office
market has expanded significantly in recent years. Both
domestic origin occupiers and GCC occupiers will define the
India office market over the next few years.

Evolving role of GCCs Customer service Enabling service Knowledge Innovation

in India centres centres centres centres

1,900
GCCs primarily catering GCCs stepping up the Rise of AI, IoT and tech makes GCCs a GCC leasing picks up
as cost centers for value chain to multi-functional knowledge driven setup as global occupier
Business Process provide KPO services confidence surges
Outsourcing & backend
support functions Share of GCCs in GCC demand gets
Number of operational GCCs as of 2023* (NASSCOM) office leasing at all more diversified with
time high BFSI, Engineering &
manufacturing firms
expanding their India
Source: Colliers operations
Note: Data pertains to Grade A buildings only
Data pertains to top 6 cities – Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, Pune
GCCs in India: Regaining lost momentum
H2 2023 witnessed highest GCC leasing since 2020

GCC leasing trend in India

72 msf Pandemic
- first wave
Intermittent
revival
Pandemic
- second wave
Intermittent
revival
Global geopolitical woes Steady bounce-back

Total demand of Grade A

office space from GCCs
since 2020
12.4
62%

14% 51% 10.7 10.3

10.6
7.8
YoY rise in GCC leasing 8.7
6.6 45% 45%
activity in 2023

4.7 40% 37%

33% 35%
1/2
About half of the large sized
deals (>100,000 sq ft) in 2023
were by GCCs
H1 2020 H2 2020 H1 2021 H2 2021 H1 2022 H2 2022 H1 2023 H2 2023
Source: Colliers
Note: Data pertains to Grade A buildings only GCC leasing (msf) GCC share in total leasing (%)
Data pertains to top 6 cities – Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, Pune

Driven by skilled workforce
availability, cost-efficiency, and a
favorable business environment,
Global Capability Centers (GCCs) have
been ramping up their India
operations significantly in the last few
decades.
However, since 2020, global With a continued strong domestic As foreign origin companies gradually
uncertainties in the form of pandemic, economic performance, despite expand their India presence, seeking
geo-political concerns and economic weaker outlook at global level, GCCs in cost effective office locations for their
volatilities impacted GCC confidence in India have resumed taking real estate back-office operations and R&D
business continuity and hence a positions in a steadfast manner. H2 activities, GCC leasing is expected to
palpable effect was felt in the overall 2023 specifically saw highest GCC further rise.
GCC leasing activity. leasing since 2020 at 12.4 msf.
GCC demand characterisation diversifies
Tech continues to lead while BFSI and Engineering & manufacturing are the new favourites

While US and Europe based MNCs have GCC gross leasing activity in India (2020-23): Origin country and sectoral analysis
been establishing their capability
centers for a long time, global players
from APAC region, especially Japan and
South Korea, have begun investing in
setting up their R&D/ innovation centers
in India over the past few years.

Canada 1%

India’s advantageous position stands out UK

5%
both in terms of cost and skilled talent.
Although other countries with GCC presence USA 16%

71%
have been emerging of late, India firmly EU Japan
1%
remains a GCC favorite in a highly
competitive global environment. Amidst
heightened operations in China, Philippines,
Vietnam and parts of Eastern Europe such as
Poland and Hungary, presence in India
continues to be mandatory for most MNCs.

Share of the US
origin firms in office
71%
Notes: % values show the share of origin centers in GCC leasing and account for cumulative 94% of the pie.
Remaining 6% is from countries including Australia, Malaysia, Russia, Singapore, South Korea, Switzerland, etc Technology Engg. & Mftg. BFSI Consulting
space demand by Source: Colliers | Data pertains to grade A buildings only. Data is as of Q4 2023
GCCs during
2020-2023 period

Tech occupiers maintain dominance amidst steady diversification

YoY surge (2023 vs
8X 2022) in leasing by
APAC origin GCCs
72 msf Total GCC Leasing (2020-2023)
GCC leasing in Engineering &
manufacturing sector surged
1.6X in 2023 as compared to 2020
18% 6% 4%

Office space take-up GCC leasing in BFSI sector in 2023

76%
by Tech and BFSI 45% 17% 5% 5% witnessed significant increase, almost
occupiers 4X rise compared to 2020
(amongst US origin Technology BFSI Engg. & Mftg. Consulting Healthcare & Pharma E-commerce Others
GCCs in India)
Source: Colliers | Notes: Data pertains to grade A buildings only | Data is as of Q4 2023 | Others include logistics, consumables, entertainment providers, etc.
 The unique disposition for GCCs in India
Talent, cost & economic growth prospects separate India from the rest

Advantages of GCC upon operating in India vs operating Ecosystem advantage: Factors making India a preferred GCC destination
in origin country

India

India Vs Singapore Singapore

High

China

USA
Real Estate Cost Advantage

Canada

Australia
India Vs Japan
France
India Vs France

Japan

India Vs Germany UK

India Vs USA
Germany

India Vs UK
0.0 1.0 2.0 3.0 4.0 5.0 6.0
India Vs Australia
Low

Source: IMF World Economic Outlook, January ’24 2024 GDP growth rate projections (%)

India Vs Canada

A potent mix of strong economic growth and confidence in collaborative

Low Talent Cost Advantage High business environment

Notes for interpretation

Real Estate Cost Advantage refers to average office India offers a vast pool of skilled and India's robust IT Furthermore, cultural
occupancy cost saved by home company upon setting
GCC in India. Higher values on this scale correspond to tech-savvy professionals, creating a infrastructure, affinity, English
more substantial real estate savings in India compared to talent-rich environment. Additionally, the coupled with a proficiency, and time
respective foreign country. Talent cost advantage
indicates the cost savings in terms of employee costs in country provides cost-effective conducive regulatory zone compatibility
India vis-à-vis origin country. Higher values in this scale
corresponds to higher profitability of India operations solutions both in terms of manpower framework, enhances contribute to India's
compared to respective foreign country.
and real estate expenses, making it an the ease of doing appeal as a preferred
Source: Colliers, IMD World Talent Ranking
attractive destination for companies business. location for establishing
aiming to optimize operational margins. global capability centers.
Global firms continue to prefer tech hubs
Southern cities have higher penetration of GCCs in respective office markets

City-wise GCC share in overall office

2.4x
leasing (2020-2023) and top two GCC sectors

YoY surge in GCC

63% leasing in Chennai

35%

>1.7x
in 2023

YoY surge in GCC

60%
leasing in Pune and
Share of Technology & BFSI GCCs in Mumbai in 2023
overall leasing. Product
Development, Finance, R&D
among preferred activities (2020-23) 48%

ne
Pu
Share of GCC office space demand Be
emancipating from Bengaluru and
Hyderabad (2020-23)

ai

ng
nn

al
u ru
Che
GCCs leasing large spaces across top Tech hubs 13% Overall 47%
Office Leasing

Mumb
(2020-23)
Hyderabad followed by Bengaluru’s office market is significantly driven by
GCCs. Backed by availability of high-quality commercial developments,

ai
strong talent pool, better educational eco-system and lower cost of living,

CR
global firms prefer key IT hubs in India to set up their GCCs. H
yd i- N
era
bad D el h
Typically, tech markets such as Bengaluru, Hyderabad and Chennai have
seen larger space uptake by GCCs with average transaction size of 130,000 sq
ft. At the same time, cities such as Pune, Mumbai, and Delhi-NCR are seeing
increased leasing from non-tech occupiers such as BFSI and engineering &
manufacturing, with average transaction size of 70,000 sq ft. 60%
22%

~130,000 sf Average transaction

size: Bengaluru, Hyderabad, ~70,000 sf Average transaction size
Delhi-NCR, Mumbai,
Chennai (based on GCC Gross Pune (based on GCC Gross Technology Engg. & Mftg. BFSI Consulting GCC Share in overall
city leasing
leasing during 2020-2023) leasing during 2020-2023)
Source: Colliers Source: Colliers
Note: Data pertains to Grade A buildings only Note: Data pertains to Grade A buildings only
Dollar advantage of India office markets
Sub/ near dollar markets drive almost 80% of overall GCC leasing activity

City-wise top GCC micro markets based on GCC leasing activity (2020-2023)

Bengaluru Hyderabad Chennai Delhi NCR

Top micro markets of Bengaluru and

Hyderabad account for

52%
OMR Zone 1 of the total GCC leasing activity in 2020-23

Noida Expressway, one of the most

ORR active GCC market of Delhi-NCR has

~40%
PTR
Noida Gurugram
Expressway NH 48
Gurugram Golf Course
MPR
Extension Road lower office rentals compared to the
Pune Mumbai average monthly rentals in the city
SBD

Navi Mumbai is one of few sub-dollar

markets in Mumbai and corresponds to

Whitefield SBD 1 OFF SBD Kharadi

Baner
-Balewadi
Navi
Mumbai

Powai
39%
of the GCC leasing activity in the city
LBS/Eastern during 2020-2023 period
Other Micro-markets Sub Dollar Market Near Dollar Market Suburb

Usually, GCCs earn
Source: Colliers
Note: Data pertains to Grade A buildings only. Area of micro market is indicative of commercial real estate demand of GCCs in the period 2020-23 majority of their
revenues in US Dollars
or other relatively
strong foreign
currencies.
Although monthly office space
rentals in INR values have grown
significantly over the years, the
rental outflow for GCCs in India
has remained relatively constant
in terms of US Dollar.
Typically, GCCs prefer
having a presence in
micro markets where
monthly rental expense
is less than or close to 1
US Dollar per sq ft.
GCCs focus on premium developments
Within cities global companies across sectors prefer premium office buildings

Sector-wise micro market classification based on GCC leasing activity (2020-2023)

GCCs to see further light in flex spaces

Overall GCC Occupiers SBD (66%) PBD (25%) CBD (9%)

Previously averse, GCCs are increasingly open to flex spaces for their
expansion strategies, owing to the flexibility and scalability offered by
Technology them. This trend is driven by the desire for agile and cost-effective
solutions, allowing GCCs to optimize their real estate portfolios.

BFSI
Saving of CAPEX costs including fitouts
Engg. & Mftg.
Solidifying hybrid working

Consulting Flexible
workspace Customized enterprise and
turnkey solutions
advantages
Healthcare & Pharma

Availability of flexible lease terms

E-Commerce

Attractive amenities and add-on offerings

Considering the growing popularity of distributive office

Global companies prefer Almost Sectors like models, GCCs in tech driven cities of Bengaluru, Hyderabad
having their offices in two-thirds of the engineering & and Pune are likely to embrace flexible working
locations close to employee GCC office space manufacturing and arrangements more as compared to other major cities of the
residences. Yet at the same demand across 6 healthcare & country. Incidentally, the 3 cities have the highest flex stock
time, GCCs tend to display major cities of pharma however penetration in India.
strong affinity for premium the country demonstrate equal
developments in their city of during inclination towards
operations and hence 2020-2023 PBDs owing to their
5-10% of flex In Tech sector,
commercial buildings in period came significant lower
SBDs fit most of the from SBDs rentals. seats in India GCC adoption
requirement criteria. are currently of flex spaces
being taken by is higher at
GCC occupiers 10-15%
Source: Colliers
Note: Data pertains to Grade A buildings only
% value show share of micro markets in overall GCC leasing during 2020-2023
GCC outlook: A blend of diversification, flexibility and sustainability
GCCs to lease 45-50 msf of Grade A office space by 2025
Heightened GCC activity in near-mid term
45-50
39.5
(2022 & 2023) (2024 & 2025)F
GCC Leasing (msf)
Improved business sentiments and India’s positive economic
outlook is fostering heightened demand of office spaces. It
also reflects confidence amongst foreign companies who are
looking to setup their capability centers in India.
In the next two years, we anticipate around 45-50 msf of GCC
leasing activity, contributing to about 40% of the total demand
for office spaces in India. Although bulk of the real estate
demand will come from top six cities of the country, Tier II
cities will increasingly offer quality spaces leading to
heightened GCC activity in these locations.
Leasing activity to
further diversify
While technology and the BFSI sectors are
expected to maintain their dominance in
GCC leasing, a perceptible uptick in interest
from Engineering & manufacturing, and
Healthcare firms is anticipated.
Growing preference for
green buildings
Companies are showing preference for
green and sustainable office spaces, align-
ing with corporate responsibility goals and
organizational net-zero targets.
Strategic location choices
SBDs will continue to remain popular, with
companies opting for locations that offer
proximity to talent pool, business hubs,
and residential catchment areas. PBDs
that offer good quality supply will also see
increased interest specifically from
non-tech occupiers such as Engineering &
manufacturing and Healthcare.
Expansion across
flex spaces
Flex spaces will gain popularity amongst
GCCs for fostering a collaborative
business ecosystem.
Large office space
uptake
The Indian market anticipates a surge in
multi-functional centers, encompassing R&D
and IT facilities, with GCCs poised to occupy
large office spaces specifically across major IT
parks, fostering collaboration and innovation.
Preference for Tech integrated offices
With increased digitization, GCCs are
increasingly leasing office spaces equipped
with advanced technological infrastructure
to support their operations, including
high-speed internet, cybersecurity measures,
and state-of-the-art communication tools.
Annexure: Micro-market definitions
City CBD
Bengaluru MG Road, Richmond Road, Infantry Road,
Cunningham Road, Sankey Road, Palace
Road, Vittal Mallaya Road
Chennai CBD (Chetpet, Egmore, RK Salai, T Nagar,
Teynampet, Alwarpet, Nandanam,
Nungambakkam)
Off CBD (Anna Nagar, Kipauk,
Vadapalani, Saligramam, MRC Nagar,
Adyar)
Delhi NCR Aero City, Connaught Place, Nehru
Place, Saket, Cybercity, Golf Course
Road, MG Road, NH-48, Sector 16A and
16B
Hyderabad Begumpet, Secunderabad, Jubliee Hills,
Banjara Hills
Mumbai CBD (Nariman Point, Ballard Estate, Cuffe
Parade, Churchgate)
BKC
Pune Bund Garden Road, Camp, FC Road, JM
Road, Koregaon Park, Kalyani Nagar,
Shivaji Nagar, Swargate, Raja Bahadur
Mills Road, Senapati Bapat Road,
Wakdewadi, Yerwada
SBD
SBD 1 (Koramangala, CV Raman Nagar,
IRR, Indiranagar, etc; Others)
SBD 2 (JP Nagar, Jayanagar,
Banashankari, Bannerghatta road)
ORR (stretch from Silk Board to Hebbal)
Guindy, MPR (Iyyappanthangal, Porur,
Mugalivakkam, Manapakkam,
Nandambakkam)
OMR Zone 1 (Taramani, Velachery, VSI
Estate, Kottivakkam, MGR Salai)
Jasola, Mohan Cooperative, Golf Course
Extention Road, Institutional Sectors 32
and 44, Udyog Vihar, Noida Expressway,
Noida Sector 62
SBD (Madhapur, HITEC City, Kondapur
and Rai Durg)
Off SBD (Gachibowli, Nanakramguda,
Manikonda and Kokapet)
Central Mumbai (Lower
Parel+Worli/Prabhdevi), Andheri East,
LBS/Eastern suburbs, Powai,
Goregaon/Malad
Baner-Balewadi (includes Aundh &
Bavdhan), Hadapsar (Hadapsar, Fursungi)
PBD
Electronic City (E-City 1 & 2, Hosur Road)
North (Hebbal, Jakkur, Yelahanka,
Thanisandra Road)
Whitefield (Whitefield & Brookfield),
Sarjapur Road & Mysore Road
OMR Zone 2 (Sholinganallur;
Semmencherry to Siruseri),
Pallavaram Thoraipakkam Road, GST
Road, Ambattur
Okhla, South Delhi Others, Dundahera,
Manesar, Sector Road, Sohna Road,
Southern Peripheral Road
Uppal, Pocharam, Shamshabad
Thane and Navi Mumbai
PCMC (Chinchwad, Bhosari, Pimpri),
Hinjewadi, Viman Nagar, Kharadi
For further information, please contact:
Arpit Mehrotra
Managing Director
Office Services | India
arpit.mehrotra@colliers.com
Authors:
Suryaneel Das
General Manager
Research | India
suryaneel.das@colliers.com
Shreya Bhusnur
Associate
Research | Hyderabad
shreya.bhusnur@colliers.com
Marketing & PR:
Sukanya Dasgupta
Senior Director & Head of
Marketing & Communication | India
sukanya.dasgupta@colliers.com
Design & Development:
Satnam Singh
General Manager
Marketing & Communication | India
satnam.singh@colliers.com
Vimal Nadar
Senior Director & Head
Research | India
vimal.nadar@colliers.com
Pallavi Kukdolkar
Deputy Manager
Research | Pune
pallavi.kukdolkar@colliers.com
Gruhasree Deevi
Senior Executive
Research | Bengaluru
gruhasree.deevi@colliers.com
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