In the face of global economic headwinds, India’s office space market is displaying remarkable resilience, with a consistent increase in demand noted over recent years. According to industry experts, sectors such as Banking, Financial Services, and Insurance (BFSI), startups, and IT-ITES are the primary catalysts driving this growth. Gagan Randev from India Sotheby’s International Realty highlighted the steady rise in office space demand, further accentuated by the coworking sector’s expansion post-COVID.

The first quarter of 2024 has witnessed a robust start in the office leasing sector, with 13.6 million square feet leased across the top six cities, marking a 35% increase year-over-year. Despite a slight decrease from the record highs of the previous quarter, the significant yearly growth underscores a positive market sentiment. The demand for office space is robust regarding technology and financial services, indicating a broader trend of economic vitality and corporate expansion.

Amal Mishra of UrbanVault points out that the continuous growth in office space demand is backed by a conducive economic environment, stable governance, and improved business facilitation. The availability of Grade A office spaces is also a critical factor in this upward trend. Moreover, India is becoming increasingly attractive for global companies setting up Global Capability Centers (GCC), with domestic firms also moving towards higher-quality office spaces.

The trend towards managed coworking spaces is gaining momentum, with many businesses preferring these flexible, cost-effective solutions that offer modern amenities and networking opportunities. Cities like Bengaluru and Hyderabad lead the demand for Grade A office spaces, accounting for a significant share of India’s leasing activities. Mumbai also stands out with a substantial increase in office leasing, underscoring the city’s growing appeal as a commercial hub.

Despite the challenging global economic landscape, India’s office market is growing, fueled by the burgeoning IT and financial sectors and a shift towards high-quality, flexible coworking environments. This trend points to a dynamic and evolving office space market, positioning India as a critical player in the global real estate arena.

What are Global Capability Centres (GCCs)?

Global Capability Centers (GCCs) are specialised service hubs established by multinational companies to consolidate and centralise various business functions such as IT, finance, HR, and customer service. Initially known as captive centres, GCCs are typically located in countries offering cost advantages, skilled labour, and favourable business environments. They are crucial in optimising operational efficiency, driving innovation, and supporting parent companies’ strategic initiatives. Over time, GCCs have evolved from cost-saving units to centres of excellence that contribute significantly to the parent organisation’s global strategy and value chain, often involving advanced analytics, research and development, and digital transformation initiatives.