GCCs, the third-party IT service boom continues.
Their share was 46 percent in leasing last year.
Knight Frank Report Revealed
The demand for office space in India has increased significantly, and the reason for this is that international companies are outsourcing their jobs to India, according to real estate consultant firm Knight Frank.
Global Capability Centres (GCCs) and third-party IT services companies will account for 46 percent of total workspace leasing in 2023. Knigh Frank released a report this May titled “Asia Pacific Horizon: Harnessing the Potential of Offshoring.” According to the details in this, India’s offshoring industry has grown significantly. It has secured a 57 percent share of the global offshoring market. Offshoring involves companies outsourcing their business processes or services to organisations in other countries to reduce costs and improve management capabilities. This is also known as business process outsourcing (BPO). This includes GCCs, Global Business Services (GBS), etc. GCCs are the units that companies set up internally in other areas.
Looking at the highlights of the report, the total leasing volume in the offshoring industry in 2023 was recorded at 27.3 million square feet. 26 percent increase compared to 2022. Of this, GCCs have leased 20.8 million square feet, and third-party IT services companies have leased 6.5 million square feet of office space. In 2023, the share of off-shoring in total service exports is recorded at 60 percent. Services exports are expected to triple from $63 billion in 2013 to $185.5 billion in 2023. 42 percent of the global firms providing offshoring services have operations in India.
By 2023, the number of GCCs in India will be more than 1,580. Their share in domestic office space leasing transactions will reach 25 percent in 2022 and 35 percent in 2023. Although the share of information technology companies in GCCs is significant, the recent growth in office space leasing is due to semiconductors, automobiles, pharma, and other sectors. GCCs will dominate the office market in the coming decade. By 2030, the number of these domestically is expected to reach 2,400.
