Bangalore Leads GCC Office Leasing Boom, Hyderabad and Chennai Follow Suit

The growth of Global Capability Centers (GCCs) in India has seen remarkable expansion over recent decades, driven by a combination of a skilled workforce, cost efficiency, and a favorable business environment. This surge in GCC activity has been detailed in a joint report by CBRE South Asia, a prominent real estate consulting firm, and Zyoin, a leading hiring solutions group in India. The report, titled “The India GCC Revolution: Where Real Estate and Talent Converge,” underscores the significant role that India’s top metropolitan cities play in this burgeoning sector.

Spread of GCC Deals Across Key Cities (2022 – H1 2024)

The report highlights that the GCC expansion is predominantly concentrated in India’s six major metropolitan areas—Bangalore, Hyderabad, Chennai, Pune, Delhi-NCR, and Mumbai. These cities, known for their robust talent pools, have been central to the expansion and future development of GCCs in India. As global corporations continue to reinforce their long-term commitment to India, they are leasing larger office spaces to accommodate their growing GCC operations. Between 2022 and the first half of 2024, approximately 53 million square feet of office space was leased by GCCs across these six cities.

During the first half of 2024 alone, GCC leasing activity across these cities increased by 8% year-over-year, with GCCs accounting for about 37% of the total office leasing activity in India. The banking, financial services, and insurance (BFSI) sector, in particular, saw a significant uptick, with its share in GCC leasing rising to 22%, driven by major leases from global banking and insurance firms in Bangalore, Mumbai, and Pune. Additionally, over the last two-and-a-half years, technology companies have leased about 15 million square feet of office space, further cementing their dominance in the GCC landscape. However, the sector is now witnessing diversification, with niche firms such as hedge funds, private equity firms, and engineering and manufacturing (E&M) companies expanding their presence, particularly in cities like Bangalore and Chennai. The life sciences sector is also showing increased interest in India, driven by the need to digitize services and foster product development.

Evaluation of GCC Talent

The CBRE and Zyoin report provides a detailed analysis of the talent landscape within India’s GCCs. The findings reveal that engineering and information technology functions dominate the workforce composition within GCCs, a trend fueled by the ongoing digitalization across various sectors. In the technology and E&M sectors, the operations function also holds a significant share of the workforce. Within the BFSI sector, the workforce composition is primarily driven by engineering and IT, followed by business development, sales, and finance functions.

The report also highlights the key skill sets currently in demand across various sectors. In the technology sector, skills such as Java, SQL, software development, coding, and knowledge of programming languages like C, C++, and Python are highly sought after. In the BFSI sector, there is a growing demand for expertise in areas like banking, investing, insurance, financial modeling, and risk assessment. Similarly, the E&M sector is looking for professionals with backgrounds in manufacturing, software development, and mechanical engineering.

India’s GCC ecosystem, supported by a vast talent pool of approximately 1.66 million professionals, has become increasingly attractive to global corporations. The report emphasizes that the average salary of software professionals in India is only a fraction of what it would cost in the US for similar roles. This cost advantage, coupled with the availability of a large and affordable tech workforce, makes India a prime destination for setting up GCCs. Moreover, as the GCC ecosystem matures, Indian tech talent is moving beyond traditional service roles and taking on greater product ownership responsibilities. The creation of global leadership roles within Indian GCCs is fostering homegrown talent capable of leading global teams and initiatives.

GCC City-wise Trends

Bangalore has emerged as the leading hub for GCCs in India, commanding a 40% share of the GCC leasing market from 2022 to June 2024. The city’s dominance is further reinforced by its large talent pool, which accounted for 34% of the GCC workforce in the first half of 2024. Bangalore’s position as the epicenter of GCC activity is supported by its mature technology ecosystem and thriving start-up culture. The city’s technology workforce, the largest in India, has played a pivotal role in attracting global corporations to establish their GCCs here. Sectors such as retail, aerospace, semiconductors, and life sciences are also beginning to make their mark in Bangalore, further diversifying the city’s GCC landscape. Additionally, Karnataka’s upcoming GCC policy is expected to accelerate the establishment of new GCCs and create job opportunities in the city.

Hyderabad, too, has gained prominence as a major GCC hub, thanks to the state government’s proactive policies and efficient urban infrastructure. The city offers a compelling proposition for GCCs, attracting talent from across the country with its enhanced lifestyle offerings and lower costs. Chennai has also emerged as a significant player in the GCC space, with its strong technology sector and manufacturing base drawing global corporations to set up their centers. The city’s educational institutions, particularly in STEM fields, have been instrumental in attracting new GCC entrants. Tamil Nadu’s R&D Policy 2022, which offers incentives to GCCs and R&D centers, has further bolstered Chennai’s position in the GCC market.

Pune, traditionally known as a BFSI stronghold, is witnessing renewed interest from engineering, manufacturing, and technology firms. The city’s competitive real estate costs, cosmopolitan talent pool, and proximity to automotive and engineering hubs make it an attractive destination for GCC occupiers. Large deals in the first half of 2024 have positioned Pune as a key player in the GCC leasing market.