The Rise of Global Capability Centers
Torbit Realty- June 09, 2024
As Global Capability Centrer register a significant leasing surge, they are set to garner a sizeable 40-45 msf of leasing between 2024-25, making for 35-40 percent of the total office leasing in the country.?
According to a recent 世邦魏理仕 report, leasing by Global Capability Centres (GCCs) increased by 17 percent Y-o-Y in FY 2023-24 compared to FY 2022-23. The leasing by GCC’s in the country stood at 22.5 mn. sq. ft. in FY 2023-24 as compared to 19.2 mn. sq. ft. in FY 2022-23. This growth during April 2023-March 2024 was primarily driven by key sectors such as Engineering and Manufacturing, BFSI and technology sectors.
In January-March 2024, GCCs leased 29 percent of the total office space leased in India. Notably, the total leasing in the GCC segment stood at 4.2 mn. sq. ft. in January-March ‘24. Among these GCCs, E&M (Engineering and Manufacturing) companies accounted for over a quarter of the space, with automobile firms following closely behind.
GCCs have become an important catalyst for change in the Indian office sector. With 1.3 mn talent as of 2019, the sector saw a 30–35 percent share of total office leasing in India in 2017-2019 period with over 1250 operational GCCs. Between 2020-2022 period, GCCs accounted for 38–43 percent of the total leasing, housing over 1580 operating GCCs with a talent pool of 1.66 mn as of 2022. We anticipate that during 2023-2025 period, the GCCs will account for a significant 35–40 percent of the total office leasing. Moreover, India has been a leader in the growth of GCCs, expected to host over 1,900 GCCs by 2025 with a professional talent pool that exceeds 2 mn.
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India’s vast reservoir of skilled professionals positions it as a premier destination for GCCs aiming to tap into a diverse talent pool and enhance their operational capacities. With an estimated 5.4 million tech experts, India provides GCCs with an abundant talent landscape for thriving and innovating. Moreover, the country offers a competitive cost framework encompassing talent, rentals, and operational costs, presenting an attractive proposition for businesses seeking to optimize their operational expenses while maintaining high standards.
Established companies, encouraged by the success of their current operations, are actively pursuing expansion initiatives. Major global players in sectors like Banking, Financial Services and Insurance (BFSI) (Banking, Financial Services, and Insurance), technology, and Engineering and Manufacturing (E&M) are anticipated to grow their GCC presence in India further, potentially exploring multi-functional centers. Established GCC occupants with long-term strategies may consider establishing large campuses in India’s key urban center.
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