Knight Frank Report: India’s Global Capability Centres Estimated to Reach 26 mn sq ft by 2027
Shaping India’s Future in Business Innovation
The latest report from Knight Frank highlights the growth and potential of Global Capability Centres (GCCs) in India. The report projects the office absorption by GCCs to reach an estimated 26 mn sq ft by 2027, up from 19.69 mn sq ft in 2023. This growth signifies India’s ability to enhance processes and drive business innovation.
Increased Transaction Activities Reflecting Evolution in Business Strategies
According to the report, transaction activities between 2018 and 2023 have increased by 16%, with GCCs completing 6,667 office leasing deals across eight major cities. This surge in deals demonstrates the need for Data, AI, and Analytics leaders in GCCs to collaborate and discuss their vital role in creating competitive advantages for global enterprises. The report emphasizes the urgency to identify new growth opportunities, drive innovation with Gen AI, and realign business strategies.
Leading Sectors and Cities for GCCs in India
Knight Frank’s report sheds light on the dominant sectors and cities for GCCs in India. The IT/ITeS sector leads the chart, followed by BFSI (Banking, Financial Services, and Insurance) and Consulting. Mumbai boasts the highest percentage of GCCs under the BFSI sector, while Bengaluru takes the lead in the IT/ITeS sector.
Between 2018 and 2023, the report reveals that approximately 5,349 GCC-focused office deals in India were finalized under 50,000 sq ft across the eight cities. The medium segment, which encompasses office spaces between 50,000 and 100,000 sq ft, witnessed 790 GCC deals. Additionally, 528 GCC deals involving office spaces larger than 100,000 sq ft were signed during the same period.
Rahil Gibran, the National Director of Occupier Strategy and Solutions, Bengaluru at Knight Frank India, emphasizes the continuous growth of the GCC market in India. He notes that currently, there are over 1,600 GCCs in the country. The development of new GCCs, particularly in the manufacturing sector, has contributed to this growth. Furthermore, the talent landscape, particularly in the technology sector, has evolved to meet the demands of these new GCCs, resulting in further expansion and evolution of the GCC market in India.
India and Its Global Competitiveness in GCC
The report highlights India as a significant hub for GCCs alongside destinations such as the US, Latin America, China, Europe, and the Asia-Pacific region. India, the US, and China stand out for their ease of hiring talent. Additionally, India and the Asia-Pacific region’s operational costs are relatively lower compared to global averages. Consequently, multinational corporations worldwide, notably US companies, consider India a preferred destination for establishing or expanding their operations.
Adapting to a Distributed and Hybrid Operating Model
The current global operating model critically assigns roles based on location. However, the distributed model has emerged, incorporating centralized work-from-home strategies to minimize costs while maintaining effectiveness and risk control. This new model allows for the migration of roles, resulting in higher savings and lower costs. Interestingly, Knight Frank’s model chart shows that the hybrid model provides the maximum benefit for GCCs in India, reflecting the evolving dynamics and flexibility necessary for long-term success.
In conclusion, Knight Frank’s report on India’s Global Capability Centres paints an optimistic picture of the country’s potential for growth and innovation. With an exceptional track record, India remains a key player alongside other global destinations in facilitating business transformation and gaining a competitive edge. As India’s GCC market continues to flourish, it holds the promise of shaping a new era of development in various sectors.
