Global firms reshape India’s office market through innovation

Mumbai: India’s commercial real estate sector is undergoing a structural transformation, powered by the rapid expansion of Global Capability Centres (GCCs). Once viewed as back-office support units, GCCs are now emerging as strategic hubs for artificial intelligence (AI), research and development (R&D), and digital innovation—reshaping both the nature of work and the demand for office space across the country.

According to a recent ICRA report, GCCs are projected to lease 50–55 million square feet of Grade A office space between FY2026 and FY2027, accounting for nearly 40 per cent of total demand in India’s top six markets viz. Bengaluru, Chennai, Delhi NCR, Hyderabad, Mumbai Metropolitan Region, and Pune. This surge reflects not only the scale of global investment but also a shift in purpose—from cost arbitrage to capability building.

Source: Propequity, ICRA Research; P - Projected

“India’s commercial office sector is at a pivotal juncture, with GCCs driving a structural transformation in demand. As GCCs evolve into innovation and R&D hubs, ICRA expects sustained leasing momentum, especially in tech-enabled and green-certified office spaces,” said Anupama Reddy, Vice President and Co-Group Head, ICRA.

The transformation is visible in the sectors driving this growth. While technology remains dominant, engineering & manufacturing and banking, financial services & insurance (BFSI) have significantly expanded their footprint. Between FY2018 and FY2025, engineering & manufacturing’s share of GCC leasing rose from 12 per cent to 25 per cent, while BFSI climbed from 15 per cent to 21 per cent. This diversification underscores India’s appeal not just for scale, but for specialised talent and innovation.

India’s cost advantage remains compelling. Prime office rentals in top cities range from $1–2 per square foot per month, making them among the most affordable globally. Combined with a deep talent pool and proactive policy support—including subsidies and infrastructure incentives—India offers a rare blend of affordability and capability.

GCCs are now central to global firms’ AI and R&D strategies. Many are leading initiatives in machine learning, cloud computing, and product development from their Indian offices. This evolution is not merely operational—it’s strategic. By embedding innovation functions within GCCs, companies are positioning India as a global centre for future-ready enterprise.

With the number of GCCs expected to grow from 1,700 today to over 2,500 by 2030, and revenue projected to exceed $100 billion, the implications for India’s commercial real estate are profound. The shift from transactional leasing to long-term strategic investment signals confidence in India’s role as a global innovation hub.