India's Global Capability Centers (GCCs) are increasingly favoring larger office spaces, signaling a shift towards long-term expansion and operational consolidation, according to a recent report by Vestian. In FY 2025, GCC leasing activity saw a significant increase, with total leased space reaching 31.8 million sq ft, a 24% rise compared to the previous fiscal year. While the total area leased expanded, the number of GCC transactions actually decreased by 4% to 305, highlighting a preference for larger spaces and long-term commitments.

This trend is further underscored by a notable surge in large transactions, defined as leases exceeding 1 lakh sq ft, which jumped by 44% from 15.8 million sq ft in FY 2024 to 22.8 million sq ft in FY 2025. This substantial increase indicates that GCCs are prioritizing long-term planning, operational efficiency, and sustainable growth by investing in larger, integrated facilities.

Fortune 500 companies have played a significant role in driving this growth, leasing 13.5 million sq ft, which accounts for 43% of the total GCC space absorbed in FY 2025. This represents a 25% increase compared to the previous year, reaffirming India's position as a strategic destination for global firms seeking to centralize their operations and tap into the country's skilled talent pool.

Several factors contribute to India's attractiveness as a GCC hub, including cost optimization strategies, a vast pool of skilled professionals, improving infrastructure, supportive government policies, and the ease of doing business. Shrinivas Rao, CEO of Vestian, noted that GCCs contribute significantly to India's office market, accounting for over 40% of absorption in the past two years, and expects this share to grow further. He attributes this growth to the expansion of large conglomerates across various industries, including IT-ITeS, BFSI, Healthcare & Lifesciences, Engineering & Manufacturing, and Consulting Services.

The IT-ITeS sector continues to dominate GCC leasing, accounting for 46% of the share in FY 2025. However, this is a decrease from the 53% share held in FY 2024. Meanwhile, the BFSI sector has seen significant growth, increasing its share from 14% to 22%. The Healthcare & Lifesciences sector has also experienced growth, rising from 5% to 8%.

Among Indian cities, Bengaluru remains the leading hub for GCCs, with 12.43 million sq ft of office space absorption in FY 2025, a 49.1% increase compared to the previous year. GCCs accounted for 65% of the city's total office absorption, the highest among the top seven cities. Mumbai also saw a substantial increase in GCC absorption, jumping to 3.68 million sq ft in FY 2025, a 170.3% increase. Other cities like Pune and NCR also experienced growth in GCC leasing, while Chennai and Kolkata saw declines.

In conclusion, the Indian GCC market is witnessing a clear trend towards larger office spaces, driven by the expansion of global firms and their strategic focus on long-term growth and operational efficiency. With its skilled workforce, cost advantages, and supportive ecosystem, India is well-positioned to maintain its leadership in the global GCC landscape.