NEW DELHI, Apr 18
India’s offshoring market has evolved itself as a significant occupier in India’s office space with leasing over 46 per cent of office space in 2023, with GCCs being the biggest offshore occupier, said a report by Knight Frank. India’s offshoring market witnessed an increase of 26 per cent from the previous year, at an overall leasing volume of 27.3 mn sqft in calendar year 2023.
According to the ‘Asia Pacific Horizon: Harnessing the Potential of Offshoring’ report by Knight Frank, India’s office real estate market has seen a positive trend from GCCs, seeking growth opportunities in the global offshoring industry. With more than 1580 centres across the nation in 2023, the GCC’s proposition in the Indian leasing transactions has increased from 25 per cent in 2022 to 35 per cent in 2023.
Though Information Technology, the report stated, remains the biggest GCC occupier in the country, the growth was significantly propelled by GCCs from the industrial sector, particularly in the semiconductor, automobile, and pharmaceutical industries.
Viral Desai, Senior Executive Director, Occupier Strategy & Solutions, Industrial & Logistics, Capital Markets and Retail Agency, Knight Frank India, said, “India has been a traditional leader in the outsourcing market and the meaningful policies of the government has augmented its position with a unique proposition of a high-skill, low-cost market.
Over the past decade, India has transformed itself from a cost-effective centre into a value-adding captive centre. By aligning itself with evolving needs of global businesses, India is now an established centre of excellence. The growing share of GCC in total leases will remain supportive of office market demand in 2024. Further it is projected that GCCs will potentially drive the office market in the next decade. By 2030, there will be an estimated 2,400 GCCs across India as it emerges as a global technology and services hub.
Assuming a similar pace of growth, the number of GCCs in India may scale up to 2880 by 2034.” India:
The offshoring industry accounts for nearly 60 per cent of overall service exports in 2023. IT service exports have grown threefold from $63 billion in 2013 to $185.5 billion in 2023.
India is expected to achieve the one billion sqft mark in office stock by 2025, mainly catapulted by GCCs. Employs nearly 4.1 million people in India.
Philippines: Projected to represent roughly 10 -15 per cent of the global offshoring market. An estimated 1.6 million Filipinos are employed across more than 1,000 offshoring firms. It accounts for 6.0 per cent of GDP.
Malaysia: Offers an estimate of more than 8 per cent share of the Asia-Pacific offshoring market. Strong government support to develop digital skills.
Vietnam: Offshoring market revenue is expected to reach $0.84 billion with a 2024–2028 CAGR of 8.78 per cent, according to Statista. The presence of major technology firms positions the country as a global digital hub, 82 per cent of key players consisting of SMEs.
Tim Armstrong, Global Head of Occupier Strategy and Solutions, Knight Frank, said, “Companies today face a multitude of challenges, including cost management, sustainability and talent retention and attraction.
At a time when companies worldwide are looking to increase performance, efficiency and innovation whilst also prioritising cost control, Asia-Pacific offers considerably lower operating costs, at nearly 70 per cent less than the US, based on Knight Frank research.
For every square foot of office space, occupiers can expect to save on average USD 70.86 in the four cities compared with mature markets. This translates to a staggering 54 per cent cutback in occupancy costs annually.”
