Global Capacity Centres Drive Premium Office Space Growth in India
In Q1CY25, GCCs leased 88 per cent of the total office space in green buildings as part of their broader commitment to achieving carbon neutrality.
Global Capacity Centres (GCCs) are fueling the premiumisation of India's office real estate market, driven by their demand for Grade-A, ESG-compliant buildings equipped with advanced smart technology systems — critical to achieving their sustainability goals.
GCCs are opting for premium real estate, not only to bolster brand reputation, but to attract and retain top talent, improve operational efficiency, and enhance employee productivity. These standards have made their office selection process more stringent than ever.
This growing demand has had a positive impact on the Indian office market. It has also led to a surge in premium office space, higher penetration of smart technology, and a focus on sustainability. Developers are now investing more in creating high-quality, eco-friendly buildings that meet the stringent criteria of GCCs.
The trend towards premium office spaces is not just limited to major metropolitan cities like Mumbai, Bangalore, and Delhi. Smaller Tier-II and Tier-III cities are also witnessing a significant increase in demand for premium office space, as GCCs expand their operations to tap into a wider talent pool.
The rise in demand for premium office space is also driving up rental rates. According to recent reports, rental rates in premium office spaces have seen a steady increase over the past few years, with a notable acceleration in the last quarter. This trend is expected to continue as more GCCs enter the market and the competition for prime locations intensifies.
Moreover, the focus on ESG (Environmental, Social, and Governance) criteria is becoming a key differentiator in the office real estate market. GCCs are increasingly prioritizing buildings that are certified for their sustainability practices, such as LEED (Leadership in Energy and Environmental Design) and BREEAM (Building Research Establishment Environmental Assessment Method).
In response to this demand, real estate developers are incorporating more sustainable features into their projects. These include energy-efficient lighting, water conservation systems, and renewable energy sources. The integration of smart technology is also playing a crucial role in enhancing the energy efficiency and operational efficiency of these buildings.
The impact of GCCs on the Indian office market is not just limited to the premiumisation of office spaces. It is also driving innovation in the real estate sector, as developers and property managers seek to meet the evolving needs of GCCs. This includes the adoption of new technologies, such as IoT (Internet of Things) and AI (Artificial Intelligence), to create smarter, more connected buildings.
In conclusion, the growing presence of GCCs in India is reshaping the office real estate market. The demand for premium, ESG-compliant office spaces is driving up rental rates, fostering innovation, and promoting sustainability. As GCCs continue to expand their operations in India, the trend towards premiumisation is likely to gain further momentum, making India a preferred destination for global businesses.
