India's office real estate market saw a strong resurgence in FY25, largely led by Global Capability Centres (GCCs), which leased 31.8 million square feet (sq. ft) of space—marking a 24% year-on-year increase, according to a comprehensive report released by real estate consultancy Vestian. This remarkable growth underlines India’s expanding role as a global hub for strategic operations across industries.

GCCs accounted for a notable 42% of India’s total office space absorption in FY25, slightly higher than the 41% share in FY24, making them the single-largest demand driver in the commercial office sector.

Why GCCs Are Fueling Office Demand in India

The continued growth in demand from GCCs is being driven by several intertwined factors:

• Cost Optimisation: India offers significant cost benefits compared to developed economies, particularly in operational expenditures.

• Large Skilled Workforce: India’s talent pool, especially in domains like IT, finance, healthcare, and engineering, remains unmatched in scale and quality.

• Robust Infrastructure Development: Rapid infrastructure investments, such as metro expansion, airport connectivity, and digital networks, have improved the appeal of Indian cities.

• Pro-Business Policies: Government policies supporting ease of doing business, tax incentives, and liberalised FDI norms have catalysed GCC growth.

• Operational Scalability: India allows companies to ramp up operations with relative ease, thanks to its large and flexible real estate inventory and support services.

Bengaluru and Mumbai: Leading the Pack

Among the seven major Indian cities studied in the report, Bengaluru retained its top spot, registering a staggering 12.43 million sq. ft of GCC-driven office leasing in FY25, up from 8.34 million sq. ft in FY24. The city remains the preferred choice for IT and ITeS companies, hosting some of the world’s largest tech GCCs.

Mumbai, India’s financial capital, saw a substantial jump in GCC leasing—from 1.36 million sq. ft in FY24 to 3.68 million sq. ft in FY25. This growth reflects increasing interest from BFSI and consulting service GCCs, many of which are expanding beyond conventional business hubs to more integrated, sustainable office campuses.

Other prominent cities such as Hyderabad, Pune, Chennai, Delhi-NCR, and Kolkata also witnessed healthy leasing activity, although Bengaluru and Mumbai dominated the absorption metrics.

Sectoral Spread of GCC Demand

The report identifies the following industries as major contributors to GCC office demand:

• Information Technology (IT) and Information Technology Enabled Services (IT-ITeS)

• Banking, Financial Services, and Insurance (BFSI)

• Healthcare and Life Sciences

• Engineering and Manufacturing

• Consulting Services

These sectors are not only expanding in volume but also transitioning into higher-value strategic functions such as data science, AI/ML, automation, cybersecurity, digital transformation, and R&D, increasing their need for modern office spaces equipped with digital infrastructure and energy efficiency.

Real Estate Developers and REITs Enabling Growth

Several leading real estate developers and REITs have emerged as critical enablers of the GCC expansion in India. Notable names include:

• DLF Ltd

• Embassy Group

• Prestige Group

• RMZ Group

• Tata Realty & Infrastructure Ltd

These companies have created Grade-A office spaces in key urban clusters, offering campus-style workplaces, sustainability certifications, wellness zones, and future-ready digital infrastructure.

Additionally, office asset-backed REITs such as:

• Mindspace Business Parks REIT

• Brookfield India Real Estate Trust

• Embassy Office Parks REIT

have ensured institutional quality in commercial leasing and attracted significant foreign portfolio investment (FPI) in Indian office assets. Their growing role is transforming India’s office market into a more transparent, liquid, and investor-friendly ecosystem.

CEO Insights and Market Outlook

Mr. Shrinivas Rao, CEO of Vestian, remarked that GCCs remain the cornerstone of India’s office space expansion, and their role is likely to grow even further in the years ahead. He highlighted India’s "compelling value proposition" through operational scalability, a robust real estate ecosystem, and globally competitive workforce costs.

The long-term outlook for GCCs in India is bullish, supported by their evolution into innovation hubs and global business enablers. Many firms are shifting more core functions to Indian centres, going beyond traditional back-office models.

Challenges and Considerations

Despite the optimistic trend, the sector still faces challenges:

• Hybrid Work Models: Some GCCs are recalibrating space requirements due to hybrid or flexible work preferences.

• Rising Rental Costs: Grade-A office rentals in certain micro-markets have surged, which may deter cost-conscious tenants.

• Talent Saturation in Key Hubs: Cities like Bengaluru are experiencing intense competition for talent, prompting GCCs to explore tier-2 cities like Coimbatore, Jaipur, and Bhubaneswar.

Nevertheless, the Indian market continues to offer one of the best ROIs for global enterprises, with expanding capacity, regulatory stability, and tech-driven talent.

Conclusion: India Remains a Global GCC Powerhouse

The FY25 leasing figures reinforce India’s undisputed position as the go-to destination for GCC expansion. With policy support, infrastructure growth, and world-class developers, India is poised to see even higher office space absorption in the coming years.

As GCCs continue to diversify their functions, focus on innovation, and deepen their roots in Indian cities, the office real estate sector is set to play a central role in India’s global economic narrative. With the right mix of policy, infrastructure, and human capital, India could soon become the world’s largest and most sophisticated GCC ecosystem.

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