South Indian Cities: The Dominant Force in India's GCC Market

South Indian cities are emerging as the epicenter of Global Capability Centers (GCCs) in India, capturing a substantial 64% of the country's GCC office leasing. These cities, known for their robust technology ecosystems, deep talent pools, and superior infrastructure, are transforming the landscape of India's commercial and residential real estate.

GCCs are no longer just back-office support units; they have evolved into core innovation, R&D, and decision-making centers for global corporations. South Indian cities, with their advanced technological infrastructure and a wealth of skilled professionals, are well-positioned to meet the demands of these evolving corporate needs.

The Core of GCC Dominance: South Indian Cities

Bengaluru – India’s GCC Capital

Bengaluru, often referred to as the Silicon Valley of India, contributes about 40% of India’s total GCC office leasing. This city is home to advanced GCCs focused on artificial intelligence (AI), product engineering, cloud computing, and deep tech R&D. Major corridors such as Whitefield, Outer Ring Road, and Sarjapur Road have transformed into high-density employment zones, attracting a significant number of multinational corporations.

- Real Estate Impact: Bengaluru's strong rental demand and sustained price appreciation are expected to continue, with a projected price appreciation of 8-11% over five years and an annual rental growth of 6-8%.

Hyderabad – The Fastest Scaling Challenger

Hyderabad, while contributing around 9% of India’s GCC leasing, is experiencing one of the fastest growth rates in the country. The city is a preferred destination for large campus-style GCCs in banking, financial services, and insurance (BFSI), digital services, pharmaceuticals, and cloud platforms. Key areas like HITEC City, Gachibowli, and the financial district are becoming magnets for global occupiers.

- Real Estate Impact: Hyderabad offers competitive entry prices, rapid rental growth, and strong capital appreciation potential over the next decade. Residential prices are expected to grow at a CAGR of 7-9%, with rental growth of 6-7%.

Chennai – Engineering & Manufacturing GCC Hub

Chennai contributes approximately 15% of India’s GCC office leasing, solidifying its role in South India’s 64% share. The city is a preferred destination for engineering, automotive, electronics, and industrial R&D GCCs. The OMR corridor and southern suburbs continue to attract steady, long-term occupier demand.

- Real Estate Impact: Chennai offers stable appreciation, lower volatility, and consistent rental absorption driven by long-tenure GCCs. Residential prices are expected to grow at a CAGR of 6-8%, with rental growth of 5-6%.

City-wise GCC Concentration (Indicative)

| City | Share of India’s GCCs approx. in % | Key Strengths | |------------|------------------------------------|----------------------------------------| | Bengaluru | 35 – 40 | Deep tech, R&D, product engineering | | Hyderabad | 15 – 18 | Digital, cloud, pharma, BFSI | | Chennai | 8 – 10 | Engineering, automotive, manufacturing | | Coimbatore | Growing | Cost-efficient tech & analytics | | Kochi | Growing | Fintech, design, mid-size GCCs |

Other Indian Cities – The Remaining 36%

Cities such as Pune, Delhi NCR, and Mumbai account for the remaining 36% of GCC leasing. While these markets benefit from GCC expansion, they lack the scale, clustering effect, and depth of tech talent seen in South India. GCC activity in these cities is more fragmented and often focused on niche functions rather than large integrated hubs.

GCCs Office Leasing

In Q1 2025, South Indian cities accounted for nearly 64% of all GCC office space leased across India’s top seven cities. The sector-wise distribution of leasing is as follows: IT/ITeS (35%), BFSI (22%), Manufacturing & Industrial (13%), E-commerce (6%), Consulting (5%), and Others (19%).

Why South India Continues to Lead

South India's dominance in the GCC market is driven by several factors: - Large Pools of Talent: South India boasts a large pool of engineers, AI specialists, data scientists, and product developers. - Early Adoption of Captive Centers: Cities like Bengaluru, Hyderabad, and Chennai have embraced the captive center model early, benefiting from strong clustering effects, easier scaling, and a vibrant ecosystem of vendors, startups, and innovative networks. - Superior Infrastructure: These cities offer good infrastructure, including international airports with strong global links, established IT corridors, and large Grade A office spaces. - Global Connectivity: South Indian cities are well-connected globally, making them ideal for large multinational operations. - Rising Demand for Advanced Technologies: There is a growing demand for AI, semiconductor design, sustainability tech, and cybersecurity, areas where South India excels.

GCC Growth in the Next 5 Years

South India is expected to retain over 60% of the GCC market share by 2030. Tier 2 cities like Coimbatore, Kochi, and Trivandrum will absorb overflow demand. GCCs will continue to drive premium office demand, high-end housing, and urban infrastructure growth, providing significant economic benefits and employment opportunities.

Conclusion

South India’s 64% dominance in India’s GCC ecosystem is not a short-term phenomenon; it is the result of decades of ecosystem building, policy support, and talent development. Bengaluru leads as the innovative powerhouse, Hyderabad accelerates as the high-growth challenger, and Chennai anchors stability with engineering excellence. South India remains the strategic heart of global enterprise operations in India, driving long-term economic growth and consistently outperforming in real estate and urban development.