Commercial
Role of GCCs in India’s Rising Managed Office Space Demand
February 25, 2025
The commercial real estate landscape in India is transforming incredibly. At the centre of it all are the GCCs - Global Capability Centres in India. As companies seek to source service-based innovation from India for strategic and operational capabilities, the need for agile, scalable, and managed office spaces is surging.
Imagine vibrant office environments with infrastructure of state-of-the-art quality, collaborative work zones, and services that seamlessly adapt to dynamic business needs. The GCC's growth sets off this new norm. The managed GCCs no longer relate to the old traditional leased offices but embrace all sorts of managed spaces, which will have better flexibility and operation efficiency.
In this blog, we look at how GCCs are transforming the managed office space sector in India, why their preferences are changing, and what this implies for businesses, real estate developers, and the future of workspaces.
Overview of GCCs in India
Global Capability Centres are offshore units that manage operations for multinational corporations (MNCs). Initially conceived as low-cost back-office functions, GCCs have been remodelled into strategic innovation, research and development and core business process locations.
As of 2024, India has around 1,700 GCCs and employs more than 1.9 million people. Projections indicate a growth to 2,100–2,200 GCCs and 2.5–2.8 million employees by 2030. This demonstrates India's attractiveness as a global destination for skilled talent, technological infrastructure and cost efficiencies.
The presence of major brands such as Amazon, Microsoft and Google intensifies the nation's standing as a GCC hotspot. This extension of GCCs has formed India's commercial real estate environment, remarkably shaping office space demand and leasing trends.
Surge in Managed Office Space Demand
Managed office spaces are customised, fully serviced workspaces that are flexible, scalable and convenient. Unlike traditional offices, which third-party operators manage. With managed office spaces free companies from administrative burdens like maintenance, utilities and technology setup.
This model has been highly appealing to businesses that must remain agile in a rapidly changing environment.
Coworking trends are rising, with escalating Grade A office space demand and the GCCs directing commercial real estate growth. The coworking space lease market registered a peak value of 12.5 million square feet in 2024, which rose 44% over the previous year. Interest in flexible workspace solutions to adapt to hybrid models, cost optimisations, and post-pandemic efforts toward recovery has increased further.
Role of GCCs in Driving Demand for Managed Office Spaces
GCCs have become major users of managed office spaces. By 2025, they are set to lease at least 45–50 million square feet of Grade A office space. Bengaluru’s office market is the trend leader in this respect, accounting for 34% of GCC leasing activity in the October–December 2024 quarter. It has appeared as the most sought-after finish line for GCCs due to its booming ecosystem, skilled workforce and well-developed infrastructure.
Factors Influencing GCCs' Preference for Managed Spaces
Several factors drive GCCs toward managed office spaces:
Flexibility: Managed office spaces are dynamic and scalable and will eventually support the varied growth of a GCC without such a commitment to tenancy for periods.
Cost Efficiency: The costs are generally upfront capital-exempt because these would also have accessible infrastructure and communal facilities.
Access to Talent Hubs: Proximity to urban centres ensures access to a highly skilled workforce, a critical factor for GCCs.
Focus on Core Functions: Outsourcing office management allows GCCs to concentrate on strategic operations and innovation.
Enhanced Employee Experience: Modern managed offices are designed to prioritise employee wellness and productivity, aligning with the preferences of today’s workforce.
The shift toward hybrid work models has also influenced GCC preferences. These models necessitate workspace solutions that adapt to varying workforce sizes and operational needs.
Drivers for Growth in Managed Office Space Demand
| Driver | Explanation |
|---|---|
| Hybrid Work Models | Need flexible workspaces for changing workforce sizes |
| Post-Pandemic Recovery | Upsurge in the demand for efficient and flexible workspaces |
| Cost Optimisation | Firms look at lower overheads and scalable solutions |
| Technological Advancements | Increased requirement for tech-enabled, well-developed infrastructure |
Regional Trends and Key Markets
The footmark of Global Capability Centres in India is concentrated in major cities, each contributing uniquely to the trend:
- Bengaluru: Bengaluru is one of the chief cities in the IT industry, holding the maximum number of GCCs. Strong infrastructure and a thriving ecosystem make this city the core for managed office spaces.
- Hyderabad: With rapid development, Hyderabad has become a leader in the country with high-tech IT parks and special economic zones.
- Mumbai: Being India's financial capital, Mumbai attracts GCCs in the banking, finance and consultancy sectors, thereby creating demand for premium office spaces.
These cities have seen a positive ripple effect on their commercial real estate growth due to the demand for premium office spaces by GCCs. The inflow of GCCs has fueled investment in developments, transportation and urban amenities. Therefore, the leasing trends of office spaces in these regions indicate the overall expansion of GCCs.
The Future
The expansion of GCCs will impact India's managed office space market. There will be a high demand for quality infrastructure, innovation-driven work cultures, and grade-A commercial real estate. Therefore, GCCs will continue to dominate the leasing trends.
Beyond GCCs, sustainable and hybrid working models are shaping the future of office space management and its providers in several sectors. In this regard, managed office space providers should incorporate green practices, smart technology use and advanced security standards to meet the complex tastes of GCCs. Managed office spaces, like those offered by BuzzWorks, are preferred by MNCs, startups and enterprises alike for their flexibility and efficiency.
Conclusion
The expansions in the GCC correspond with sudden surges in the demand for serviced offices. As India becomes a major global GCC hub, the managed office space industry will keep growing, driven by the changing needs of these centres.
Managed office spaces will continue to be an integral part of corporate infrastructure in India for the long haul, providing flexibility, cost efficiency and innovation.
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