Is India the GCC Capital of the World?
GRI Club India
High-level content and networking, shaping the present and future of the real estate market
India's Global Capability Centers (GCCs) have undergone a remarkable transformation over the past five years, evolving from their origins as cost-saving operations into strategic hubs for innovation and growth.?
?? As of FY2024, the number of GCCs in India has surged to 1,700, generating USD 64.6 billion in export revenue and employing over 1.9 million professionals, according to the latest Nasscom-Zinnov India GCC Landscape report.?
This represents a substantial 40% increase in revenue from the previous year, reinforcing India's status as the "GCC Capital of the World," currently home to 17% of all global technology capability centres.
?? Looking ahead, the growth trajectory for India's GCC market shows no signs of slowing down. By 2030, the market is projected to expand to between USD 99 billion and USD 105 billion in revenue, with the number of centres increasing to 2,100–2,200 and total employment potentially rising to 2.5–2.8 million.?
This expansion is expected to be driven by the plans of 70% of Fortune 500 companies to deepen their presence in India by the end of the decade, but the country’s appeal extends beyond large corporations. Small and mid-sized firms are also seeking to capitalise on India's cost efficiency, skilled workforce, and favourable business environment.
?? The ripple effects of this burgeoning growth are clearly visible in India's commercial real estate market. A report from Colliers anticipates that GCCs will account for approximately 40% of the demand for Grade A office space in the coming years.?
Recent transactions underscore this momentum, such as Microsoft making substantial moves to expand its presence in India by acquiring two large land parcels in Pune's IT hub for a combined total of Rs 973 crore (approximately USD 118 million). These acquisitions - a 16.4-acre plot for Rs 520 crore and another for Rs 453 crore - reflect the tech giant's commitment to leveraging India's robust technology ecosystem and talent pool for its global operations.
Explore how GCCs are transforming India's commercial real estate landscape and driving economic growth at India GRI 2024, the country's leading real estate forum, on October 16th in Mumbai. Join top industry leaders for exclusive networking opportunities and gain strategic insights through dynamic, high-level market discussions!
Europe GRI 2024 - “India’s Expanding Horizon”
Last Wednesday (11th), GRI Club hosted Europe GRI 2024 at the InterContinental Paris Le Grand, bringing together almost 800 senior executives and C-level professionals active in the European real estate market.
?? In line with GRI Club's dedication to promoting global investment in India, the "India’s Expanding Horizon" session explored the increasing range of opportunities in the Indian real estate market, driven by market consolidation, government reforms, and the rise of new asset classes. The discussion highlighted India’s economic growth, vast talent pool, and accelerating urbanisation as key factors attracting foreign investors.
We extend our gratitude to Kunaal Shah (Trilegal), who not only moderated this special session but also presented the award for Fundraiser of the Year at the GRI Awards Europe ceremony, panellists Neel R. (K Raheja Corp) and Raj Menda (RMZ Corporation), and everyone else who participated in this important discussion.
Domestic Companies Dominate 47% of Leasing Activity
India's office market is undergoing a significant transformation, with domestic firms increasingly becoming key drivers of demand. According to a recent report by CBRE, from 2022 to the first half of 2024, these homegrown companies accounted for nearly 47% of all office leasing activity, representing a marked shift from the traditional dominance of foreign corporations.
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?? While American companies continue to maintain a strong foothold with 33% of office leases, and firms from the EMEA and APAC regions account for 15% and 4% of leases respectively, the rapid growth of domestic firms is reshaping the market landscape.
This surge reflects a 60% increase in the office space occupied by domestic firms over the past two years compared to the pre-pandemic levels of 2018-2019. As the domestic market evolves, CBRE projects that these companies could lease an additional 60 to 65 million square feet of office space between 2024 and 2025.
?? This momentum is primarily driven by the rapid growth of key sectors such as flexible space operators, technology companies, and BFSI (Banking, Financial Services, and Insurance), which together account for nearly two-thirds of domestic office leasing activity - 33%, 28%, and 11%, respectively..?
Supporting this trend are factors such as rising profitability, a robust banking sector, and government initiatives like the Make in India program and the Production Linked Incentive (PLI) scheme. Additionally, India’s vast talent pool and thriving startup ecosystem continue to push this expansion forward.
?? Recent transactions further highlight the robust expansion of domestic companies in the office market. For example, 315Work Avenue has expanded its presence in Pune, occupying over 100,000 square feet at the IT Park, while Brigade Group’s BuzzWorks has secured 25,000 square feet of office space in Hyderabad to strengthen its regional footprint.?
Despite the rise of domestic players, international firms remain crucial to India's office market, with Google renewing its lease for 370,000 square feet in Hyderabad for 5 years, and Goldman Sachs committing to a 10-year lease in Mumbai’s Worli area. Additionally, Blackstone Group reinforced its market presence by acquiring the One BKC building in Mumbai for Rs 2,500 crore.