GCC expansion could take India's next office boom beyond major cities

India's next wave of office demand could move beyond Bengaluru, Hyderabad, Chennai, Delhi-NCR and Pune as Global Capability Centres (GCCs) expand into smaller cities, according to a CBRE report cited by The Times of India.

State-level policies aimed at attracting GCCs are targeting nearly 1,380 new centres and about 1.18 million jobs by 2029-31, the report said. The expansion could create new demand for commercial real estate in tier-II and tier-III cities, where lower operating costs, engineering talent and government incentives are making smaller locations more attractive.

GCCs have already become a major source of office leasing in India's largest markets. According to the CBRE report, they leased more than 123 million square feet of office space across India's top nine cities between 2022 and the first half of 2026.

Around 94% of India's 2.36 million GCC professionals are currently concentrated in six tier-I cities. That concentration leaves considerable room for companies to establish operations in emerging locations, CBRE said.

The shift is also changing the kind of offices companies are looking for. CBRE said transactions exceeding 100,000 square feet are increasingly driving GCC leasing activity, while average deal sizes have grown by 18-20% since 2023.

Technology companies accounted for 23% of GCC leasing between 2022 and the first half of 2026, followed by banking, financial services and insurance at 22%, and engineering and manufacturing at 16%.

GCCs are also moving beyond traditional back-office operations. Companies are increasingly using these centres for research and development, artificial intelligence, data, cybersecurity and product development.

More than half of India's GCCs have evolved into portfolio and transformation hubs, while about 90% operate as multi-functional units, according to CBRE.

That expansion could support what is often described as a hub-and-spoke model, where companies maintain large operations in established cities while building specialised teams in smaller locations.

For the commercial real estate market, that could broaden the geography of office demand. Smaller cities that can offer skilled workers, competitive costs and suitable office buildings could attract a greater share of new GCC operations.

But incentives alone may not be enough. CBRE said the success of emerging locations will depend on faster policy execution, stronger infrastructure, availability of large-format office space and deeper talent pipelines.

That could make the availability of quality commercial buildings a key factor in determining which smaller cities benefit from the next phase of GCC expansion.

For India's office market, the change is significant. GCCs are no longer simply adding space to the country's established technology and business hubs. Their growing focus on specialised functions and larger teams could push office demand into a wider set of cities, creating new commercial real estate markets alongside India's traditional office centres.

Sources

https://timesofindia.indiatimes.com/real-estate/news/gcc-expansion-to-drive-office-demand-beyond-indias-top-cities-cbre/articleshow/133245838.cms