Knight Frank report reveals that offshoring companies dominate office leasing in India

Offshoring companies, predominantly Global Capability Centres (GCCs), have dominated office leasing in India, leasing over 46 per cent of the total office space in 2023, amounting to 27.3 million square feet. The growth in leasing volume saw a 26 per cent increase from the previous year, as reported by Knight Frank.

GCCs, which are rapidly expanding in India, have secured a significant portion of the leasing activity, making them the largest offshore occupiers in the country. Out of the total office space leased, GCCs accounted for 20.8 million square feet. Their share in office leasing has seen a notable increase, rising to 35 per cent in 2023 from 25 per cent the year before.

These GCCs are specialized captive units established by global companies to carry out specialized functions such as research, innovation, accounting, legal services, and more on a global scale. While the information technology sector is home to the most number of GCCs, other sectors like financial services, automobiles, and healthcare have also started setting up their GCCs in India.

The technology sector led the office leasing activity with 11 million square feet of leased space, followed by industrials and BFSI sectors at 5.6 million square feet each. According to Viral Desai, Senior Executive Director at Knight Frank India, the increasing presence of GCCs in office leasing will continue to support demand in the office market for the year 2024. Desai also highlighted India’s transformation from a cost-effective center to a value-adding captive center in the past decade.

Offshoring has emerged as a crucial factor driving office demand in the Asia-Pacific region, particularly in India, the Philippines, Malaysia, and Vietnam. Researchers estimate that by 2030, India could host around 2400 GCCs, solidifying its position as a global technology and services hub with the potential for further growth to 2880 GCCs by 2034.