Office leasing by GCCs hits an all-time high

Global Capability Centres (GCC) maintained strong leasing in 2024 at 29.4 million square feet with a share of 37% of the overall leasing activity across the top 9 cities in India and registering about 29% year-on-year growth, according to real estate consultancy CBRE South Asia.

Global firms have actively established and expanded their GCC operations by capitalising on the country’s skilled talent pool and a favourable business climate.

CBRE says this growth momentum is expected to persist into 2025, with new entrants setting up global centres and existing firms scaling their facilities.

Companies from sectors including technology, engineering and manufacturing and BFSI would likely drive demand for both traditional and flexible office spaces for their GCCs, with continued demand from niche sectors such as automobile, semiconductors, and life sciences, the realty consultancy says.

In the October-December 2024 period, GCC leasing represented 34% of the total leasing activity, amounting to 7.6 million sq. ft., the report says. Bengaluru led the GCC leasing segment with a 34% share, followed by Hyderabad at 20%, Delhi-NCR at 12%, Mumbai at 11%, Pune at 10%, and Chennai at 9%. Ahmedabad, Kolkata and Kochi together accounted for 4% of the GCC leasing in Q4 2024.

On a pan-India basis, overall, office leasing recorded a historic high of 79 million sq. ft. in 2024 across nine cities, says CBRE, The absorption marked a 16% Y-o-Y growth, setting a new benchmark for leasing activity. Total supply during 2024 stood at 52.3 million sq. ft.

Bengaluru dominated office space absorption during the year, accounting for approximately 28% share of the total, followed by Hyderabad with 16% and Mumbai with 15% share. In 2024, approximately 52.3 million sq. ft. of new office space was completed, with Bengaluru, Hyderabad, and Pune collectively accounting for 67% of the total supply addition.

Technology sector accounted for 24% of the total leasing activity, followed by flexible space operators at 19%, BFSI firms at 16%, and engineering and manufacturing companies at 9%.

Domestic firms continued to lead the space take-up in 2024, accounting for 45% of the total office space absorption, followed by companies from the Americas at 34%, EMEA at 16%, and APAC at 5%. The leasing activity by Indian firms was predominantly driven by flexible space operators, technology companies, and BFSI corporates.

“As we look towards 2025, the office sector in India is poised for continued growth, underpinned by sustained demand from a broad range of industries. The momentum seen in 2024 is expected to persist, with technology, BFSI, and engineering sectors, along with global capability centers (GCCs), driving the need for both traditional and flexible office spaces,” says Anshuman Magazine, chairman and CEO - India, South-East Asia, Middle East & Africa, CBRE.

“Companies are increasingly prioritising operational efficiency, which would further enhance demand for premium, future-ready assets that are designed to foster employee well-being and provide a competitive edge in talent retention,” says Magazine.