GCC share in commercial real estate is on the rise

March 23, 2024

BENGALURU: The share of global capability centres (GCCs) of foreign firms in total office space leased in India is steadily rising. Colliers, a real estate management firm, says the space leased by GCCs in 2023 is the highest since 2020.

The firm says GCCs – technology and shared services arms of MNCs – have become a significant part of commercial real estate since the pandemic. In the decade prior to that, IT firms dominated. Colliers data shows that in 2020, about 17 million square feet was leased by GCCs. That dropped to 15 million in 2021 and rose to 19 million in 2022. Last year, it grew 14% to 21.1 million. This was 37% of the total office space of 58 million leased by companies. Colliers believes this could go up to 40% in the next 24 months.

India has over 1,600 GCCs, and in this fiscal, they hired significantly more than IT services, which has traditionally been the biggest hirers of white-collar professionals. Real estate firm Cushman and Wakefield says in a recent report that growth of India’s commercial real estate was largely because of the GCCs in the recent past, and in the next few years will be dominated by them.

“GCCs have continued to scale up and more than 80 GCCs were either newly established or expanded during the year,” the report says. Real estate consultancy Knight Frank‘s recent India real estate, residential, and office market report says GCCs were the only segment in the commercial space that grew in 2023.

All other segments like flex spaces or co-working spaces and third-party IT firms have witnessed a decline. The firm says Deloitte, Qualcomm, MUFG Bank, Bank of America, Citibank and Fidelity were some of the big occupiers in 2023.

“While GCCs have been traditionally looking for private spaces, they are now warming up to flex spaces,” Arpit Mehrotra, MD of office services at Colliers India, says. “5% to 10% of the flex spaces are now being occupied by GCCs,” he says.

  • Published On Mar 23, 2024 at 12:00 PM IST

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