India is currently witnessing a significant surge in the establishment of global capability centres (GCCs). Projections indicate that the country will host 2,500 such centres over the next four years. This growth is expected to result in an office space footprint exceeding 300 million square feet, according to a recent report. At present, India is home to more than 1,800 GCCs, occupying 240 million square feet of Grade A office space across the country's top seven cities. This makes India a global leader in the GCC wave. Since 2022, 100 new centres have been established in various cities including Mumbai, Delhi-NCR, Kolkata, Bengaluru, Chennai, and Pune.

Bengaluru: A Major Player in GCC Landscape

Bengaluru is a significant player in this landscape, accounting for approximately 42% of the total space occupied by GCCs. Furthermore, GCCs represent about 50% of active, ongoing space requirements across the top seven cities. Interestingly, US-based companies have taken up around 60% of the occupied space in the country. Rahul Arora from JLL India, a real estate advisory firm, has noted that the GCCs in India are leading the way in cutting-edge research and development in AI, machine learning, and advanced manufacturing. These centres are evolving beyond their traditional roles as service providers and are becoming the nerve centres of global corporations.

GCCs: The Nerve Centres of Global Corporations

Indian leadership is playing pivotal roles in shaping worldwide business strategies, highlighting India's emergence as a crucible of innovation where multinational enterprises are forging their future. In the third quarter of 2024, GCCs continued their robust momentum in India, contributing 30% to the total gross leasing volume (GLV). The GLV in the overall office sector reached 24.8 million square feet across the top eight cities, marking the second-highest quarterly leasing volume in the sector's history. This represents a 66.4% annual YoY growth in GLV and a strong 14.3% quarterly growth, showcasing overall healthy market dynamics. Total GLV crossed 66.7 million MSF in the nine months and is set to surpass 80 MSF in 2024.

In the 75th year of Indian Independence, the country came up with Vision India @ 2047, a set of goals it hopes to achieve in order to become a fully developed economy by the 100th year of Independence, i.e 2047. One of the key goals of this Vision India @ 2047 is to complete India's digital transformation, which means the Indian data center industry will have a major role to play in making the nation's dreams come true.

India's Digital Transformation and the Role of Data Centers

The Vision document for India @ 2047 envisages using AI and ML for public grievance redressal, among other public services. DARPG has entered into collaboration with the Indian Institute of Technology (IIT) Kanpur and established a Data Governance Quality Unit for use of AI and ML in improved analytics of the Central Public Grievance Redressal and Monitoring System (CPGRAMS). Surajit Chatterjee, MD, CapitaLand Data Center Services Pvt. Ltd., has noted that the digital revolution has already arrived. He predicts that in the next five years, the data center as an asset class will be a developed portfolio. CapitaLand is one of Asia's largest diversified real estate groups that has 26 data centers in Asia and Europe. In India, it has data centers in various stages of development in Bangalore, Chennai, Hyderabad, and Navi Mumbai.

Dark stores, supermarkets without customer walk-ins serving online orders, and their smaller, smarter automated versions, called microfulfilment centres (MFCs), are emerging not only as a crucial link in the last-mile delivery chain but also as a disruptor in the realty space. The e-commerce vertical of Mahindra Logistics Ltd (MLL), a third-party logistics (3PL) services provider, set up its first dark store in December 2020 in Bengaluru. Since then, it has set up multiple dark stores, where e-commerce companies have outsourced the dark store or last-mile delivery operations, or both, to MLL.

India is poised to be a major hub for GCCs, data centers, and dark stores in the coming years. This growth is driven by the country's digital transformation goals, the increasing demand for office space, and the evolving needs of multinational corporations. The country's strong macro fundamentals and the real estate sector's resilience will help it sustain its growth trajectory, global headwinds notwithstanding. The future of India's real estate landscape is indeed promising, with the country emerging as a global leader in the establishment of GCCs and the digital revolution.