Knight Frank, in partnership with 3AI, reported that office space absorption by Global Capability Centres (GCCs) is expected to reach 26 million sq-ft by 2027, up from 19.69 million sq-ft in 2023. Since 2018, transaction activities have increased by 16%, growing from 16.99 million sq-ft, with GCCs completing 6,667 office leasing deals in eight major cities between 2018 and 2023. The growth of GCCs underscores India’s potential to improve processes and drive business innovation.
The report will be launched at the GCC X SUMMIT 2024 which is themed – ‘Reimagine the New Next in GCCs with Gen AI’ aimed to put a greater emphasis on continuous transformation via collaborative innovation and further discuss the role India plays. There is an urgent need for Data, AI and Analytics leaders in GCCs to collaboratively come together to discuss their greater role to create competitive advantage for their global enterprises. It is imperative to constantly identify new growth opportunities, drive innovation with Gen AI and realign business strategies.
Industry segment
IT/ITeS sector GCCs lead the chart followed by BFSI and Consulting GCCs. For BFSI, Mumbai leads with highest percentage of GCCs under the BFSI sector and Bengaluru leads with highest percentage of GCCs in the IT/ITeS sector.
Shishir Baijal, chairman & managing director, Knight Frank India, said, “India’s GDP growth continues to be the fastest among major economies in the world, attracting attention for its strong infrastructure, and a consistent influx of top-tier talent and corporate entities. In the dynamic landscape of global business, India’s Global Capability Centres (GCCs) have evolved beyond traditional roles to become pivotal hubs of global strategy and local ingenuity. As India solidifies its position as a cornerstone of global GCC networks, these centres emerge as unparalleled hubs of creativity and collaboration.”
Sameer Dhanrajani, CEO, 3Ai said, “The future of GCCs in India is promising, with projections showing over 1,900 centers by 2025, employing around 2 million people. Emphasis will be on integrating advanced technologies, driving innovation, and fostering sustainability. GCCs are expected to play critical roles in global operations, particularly in generative AI, customer-centric business development, and as-a-service transformations. By 2030, they will undergo significant transformation, becoming integral parts of global organizations. India centres will be led by leaders focused on innovating new products and services, shifting from their current form to essential drivers of business success.”
Office configuration deals
Between 2018 and 2023, around 5,349 GCC focussed office deals were finalised under 50,000 sq-ft across the 8 cities.; 790 GCC deals took place between 50,000 and 100,000 sq-ft, which can be marked as the medium segment. Around 528 GCC deals of above 100,000 sq-ft were the largest deals signed between 2018 and 2023.
Rahil Gibran, national director, occupier strategy and solutions, Bengaluru, Knight Frank India said, “India’s GCC market is expected to grow unabated over the next few years and already witnessed a high momentum with the current number of GCCs standing at around 1600 plus in the country. The development of new GCCs specially catering to manufacturing sector has increased on a year-on-year basis and the talent landscape mainly in the technology sector has evolved over the years to meet the growing demand of new GCCs hence helping the growth of GCC in India.”
Hybrid model is the most preferred and viable operating model for GCCs in India
The current global operating model primarily balances roles based on location. The new distributed model incorporates centralized work-from-home strategies to minimize costs while maintaining risk and effectiveness. Migration of roles within this new model can achieve higher savings and lower costs effectively. From the model chart, the hybrid model gives the maximum benefit for a GCC in India.
India remains a key hub for GCCs, alongside other destinations such as the US, Latin America, China, Europe, and the APAC region. India, the US, and China stand out for their ease of hiring talent. Conversely, India, and the APAC region are noted for lower operational costs compared to global averages. Therefore, multinational corporations worldwide, increasingly view India as a preferred destination for establishing or expanding operations, with US companies at the forefront of this trend.
