India Becomes a Leading Hub for Global Capability Centres
Commercial real estate demand from global capability centres is set to surge, driven by the need for high-quality developments and a skilled workforce.
IndiaGlobal Capability CentresCommercial Real EstateSkilled WorkforceMncsReal Estate NewsNov 24, 2024
Khattar, a leading real estate analyst, stated that the demand for high-quality commercial developments from GCCs will continue to grow. These centres are increasingly looking for state-of-the-art facilities that can support their operations and attract top talent. The trend is not just limited to traditional IT hubs like Bengaluru and Hyderabad; cities like Pune, Chennai, and even smaller Tier-II and Tier-III cities are also witnessing a rise in GCC activities.
on GCCs
Global Capability Centres, also known as Shared Service Centres (SSCs) or Global In-House Centres (GICs), are strategic locations where multinational corporations (MNCs) set up their back-office operations, research and development (R&D), and support functions. These centres help MNCs streamline their operations, reduce costs, and improve efficiency by leveraging the local talent pool and infrastructure.
Expanding Beyond IT
While the IT sector has been the primary driver of GCCs in India, the trend is now expanding to other sectors such as finance, healthcare, and manufacturing. This diversification is driven by the increasing recognition of India's capabilities across various industries. For instance, the financial sector is setting up GCCs to handle functions like finance and accounting, risk management, and customer support.
Role of Commercial Real Estate
The rise of GCCs has a significant impact on the commercial real estate market. Developers are responding to the demand by building high-quality office spaces that cater to the specific needs of these centres. Features like advanced technology infrastructure, sustainable design, and wellness facilities are becoming standard in new developments. This shift is not only attracting GCCs but also enhancing the overall business environment in these cities.
Challenges and Solutions
Despite the growth, there are challenges that need to be addressed. One of the primary concerns is the availability of skilled talent. While India has a large pool of graduates, there is a need for continuous upskilling to meet the evolving demands of MNCs. Initiatives by the government and private sector to bridge this gap, such as partnerships with educational institutions and skill development programs, are crucial.
Another challenge is the infrastructure, particularly in Tier-II and Tier-III cities. While these cities offer lower operational costs, they often lack the necessary facilities and connectivity. Investments in infrastructure, both by the government and private sector, are essential to make these cities attractive for GCCs.
Future Outlook
The future looks promising for GCCs in India. With the government's push for Make in India and Digital India, the country is well-positioned to attract more MNCs. The focus on ease of doing business and the availability of a young, dynamic workforce are key factors that will continue to drive growth. According to Khattar, the next five years will see a significant increase in commercial real estate demand from GCCs, particularly in cities that are not traditional IT hubs.
In conclusion, the rise of GCCs in India is a testament to the country's growing prominence in the global business landscape. The demand for high-quality commercial real estate is just one aspect of this trend, reflecting the broader economic and social changes that are underway. As India continues to develop and attract more MNCs, the impact on various sectors, from real estate to education, will be profound.
About the Companies
Khattar & Associates is a leading real estate consulting firm with expertise in commercial property development and market analysis. The firm provides strategic insights and solutions to developers, investors, and corporate clients. With a deep understanding of the Indian real estate market, Khattar & Associates helps its clients navigate the complexities of the sector and capitalize on emerging opportunities.
Frequently Asked Questions
What are Global Capability Centres (GCCs)?
Global Capability Centres, also known as Shared Service Centres (SSCs) or Global In-House Centres (GICs), are strategic locations where multinational corporations (MNCs) set up their back-office operations, research and development (R&D), and support functions.
Why are GCCs important for the Indian economy?
GCCs are important for the Indian economy as they bring in foreign investment, create jobs, and enhance the skill level of the workforce. They also contribute to the growth of the commercial real estate sector and help in the development of infrastructure in various cities.
What sectors are driving the growth of GCCs in India?
While the IT sector has been the primary driver, other sectors such as finance, healthcare, and manufacturing are also setting up GCCs in India to handle functions like finance and accounting, risk management, and customer support.
What challenges do GCCs face in India?
Some of the challenges faced by GCCs in India include the availability of skilled talent, infrastructure in Tier-II and Tier-III cities, and the need for continuous upskilling of the workforce to meet the evolving demands of MNCs.
How is the government supporting the growth of GCCs in India?
The government is supporting the growth of GCCs through initiatives like Make in India and Digital India, which aim to improve the ease of doing business and attract more MNCs. There are also partnerships with educational institutions and skill development programs to bridge the skill gap.
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