GCCs To Account For 40% Of Demand For Grade A Office Space In India: Colliers-Rics Report

Global Capability Centres (GCCs) are poised to drive significant demand for office space in India, accounting for nearly 40 per cent of the demand for Grade A office space in the coming years, according to a recent report by Colliers and RICS. The report, titled "The Multifaceted Occupier Landscape of India Office Market," highlights the shifting dynamics of office space demand in India, with a strong focus on engineering, manufacturing, and BFSI (banking, financial services, and insurance) sectors.

The report suggests that engineering and manufacturing, alongside BFSI occupiers, will account for approximately 40 per cent of the demand for office space between 2025 and 2027. The repositioning of GCCs as knowledge and innovation hubs will be a key factor in driving this demand.

The key findings from the report highlight that the engineering and manufacturing sectors are expected to lease around 12 million square feet annually between 2025 and 2027, while BFSI occupiers will secure approximately 11.5 million square feet, marking a 35 per cent increase compared to previous years.

Although the technology sector will continue to lease around 15 million square feet annually, its overall share of office space demand is projected to stabilize as hybrid working models gain traction. Global Capability Centers (GCCs) are expected to contribute to around 40 per cent of the total Grade A office space demand, with domestic occupiers, including flex space operators, playing a significant role in market expansion.

In terms of city-wise demand, Bengaluru will maintain its dominance across sectors, with annual leasing activity nearing 20 million square feet, while Hyderabad, Chennai, and Pune are poised to see growing demand, especially from flex spaces, BFSI, and engineering firms.

“Bengaluru remains a key market for office leasing, but cities like Hyderabad, Chennai, and Pune are rapidly catching up," said Vimal Nadar, Senior Director & Head, Research, Colliers India. "We are also seeing emerging demand from smaller Tier-II cities like Bhubaneshwar, Coimbatore, and Chandigarh."

Sectoral Trends:
BFSI and Consulting Firms will continue to prioritise premium office spaces in central business districts (CBDs), while engineering and manufacturing firms will focus on cost-effective real estate solutions.

Flex Space Operators will favour secondary business districts (SBDs) for strategic connectivity and infrastructure, continuing to account for around 15-20 per cent of total office leasing.
Sustainability & ESG Focus: The report emphasises a growing trend toward sustainable office spaces, with about 75 per cent of office space take-up in 2024 expected to be in green-certified buildings. This is largely driven by sectors like engineering, BFSI, and technology, which are increasingly aligning with ESG (environmental, social, and governance) goals.

With approximately 160 million square feet of new office space projected to enter the market over the next three years, 80 per cent of this will be green-certified, underscoring the shift towards sustainable real estate development in India.

As GCCs, BFSI, and manufacturing firms increasingly adopt distributed work models, the Indian office market is set for a new phase of growth, driven by innovation, sustainability, and diverse sectoral demand.