India has emerged as a major innovation hub, with developers claiming that global capacity centers (GCCs) account for around half of the prime office real estate stock in the country.

Between the 123rd and 424th quarters, 124 new companies entered into deals in the GCC and took office space for new capabilities or R&D centers, according to Cushman & Wakefield, a global real estate consultancy.

Nearly two-thirds of them came from the United States. For most of them, India is now the largest office hub.

“India has, over the years, developed a pool of skilled and hard-working talent, available in abundance and at lower cost compared to developed economies. Global businesses are taking advantage of this in style. And also leveraging the global Grade A++ quality solutions available in India, at a fraction of the costs compared to developed economies,” said Sriram Khattar, Managing Director, DLF Rental company.

Khattar said commercial real estate demand from global capacity centers will increase for high-quality developments.

“India has become a global leader in the Gulf countries’ evolution from traditional back-office operations to strategic hubs driving innovation, digital transformation and business excellence. This shift is fueled by India’s unprecedented talent pool and vibrant innovation ecosystem. said Alok Aggarwal, MD and CEO of Brookfield Properties in India. More than 15 million square feet of the company’s 55 million square foot portfolio accommodate CCGs. New small and medium-sized companies accounted for a significant share of GCC deals between Q1 2023 and Q2 2024. Between Q1 2023 and Q2 2024, 55 of 124 new GCC companies (44% share) ) who entered into GCC agreements had an annual turnover of less than US$1 billion.

“India helps multinational companies drive growth and achieve their strategic goals by becoming a global innovation center and R&D hub. It offers businesses a vast pool of technology talent, the third largest technology and start-up ecosystem, strong innovation and R&D capabilities, and the ability to build sophisticated global capability centers,” said Anshul Jain, Managing Director of Tenant Representation Services in India, Southeast Asia and APAC for Cushman & Wakefield.

“Today, as part of its global plans, India has moved from simply providing cost advantages and back-office services to serving as a driver of innovation and the pipeline of growth. Moreover, it’s not just Fortune 500 companies expanding their CCGs in India; a significant proportion of new entrants are small multinationals recognizing the strategic value of an Indian presence,” Jain said.

During Q1 2023 and Q2 2024, the total office space leasing volume by GCC companies (new + existing) stood at 28.8 million square feet. During this period, office leasing by new GCC companies amounted to 8.8 million square feet, accounting for approximately 30% of the GCC’s total office leasing volume; Existing GCC companies have occupied 20 million square feet of office space through expansion deals.

“In GCC, the key word is capacity. We moved from outsourcing to capacity. We see patents coming out of our park. And you see innovations in all segments. Nearly 50% of our total demand comes from GCC,” said Sumit Gera, CEO, India Business Parks – CapitaLand.