Resilient economy: Global capability centres lead real estate absorption in India

Driven by the country’s skilled talent pool and operational cost advantages, global capability centres (GCCs) are leading real estate absorption in India which have surpassed pre-Covid levels amid a resilient economy.

GCCs have committed about 27.7 million square feet (sq ft) of grade A commercial real estate in 2024, and 24.1 million sq ft in 2023, which represent 36 per cent and 38 per cent of overall real estate absorption, respectively, according to JLL.

On the other hand, latest office market assessment by real estate consultancy Knight Frank India said that GCCs leased 22.5 million square feet (mn sq ft) in 2024, accounting for 31 per cent of total leasing volumes.

Of this, 50 large deals (over 100,000 sq ft each) totalled 12.1 mn sq ft, while 56 mid-sized deals (50,000-100,000 sq ft) contributed 4.4 mn sq ft. Additionally, 223 smaller deals (under 50,000 sq ft) accounted for 5.5 mn sq ft of leased space, the report stated.

The net office absorption in top seven cities reached nearly 50 million sq ft in 2024, marking a substantial 29 per cent year-on-year increase from 38.64 million sq ft in 2023. This was primarily driven by robust demand from Global Capability Centres (GCCs) and the technology sector, said another report by Anarock Group.

India’s position as a preferred destination for GCCs continues to be a primary catalyst for office space absorption.

Major multinational corporations are strategically expanding their operational presence, "drawn by the country’s skilled talent pool and operational cost advantages".

This trend is projected to generate substantial demand for Grade A office spaces in key markets like Bengaluru, Hyderabad, NCR, MMR and Pune.

The evolution of workplace strategies continues to influence market dynamics. While hybrid work models remain prevalent, organizations are reimagining their office spaces to enhance collaboration, innovation, and employee well-being, according to Anarock report.

Indian office market is poised to experience positive growth in 2025, driven by multiple favourable factors shaping the commercial real estate landscape. The steady revival of global economies, particularly in the technology sector, is expected to drive renewed demand for office spaces across India’s top 7 cities.