Off-shoring market drives office leasing in Hyderabad

HYDERABAD: With global capability centres (GCCs) increasingly mopping up office space in Hyderabad, the city’s offshoring market witnessed the second highest office space leasing at 6.6 million sq ft, after Chennai, among the top eight markets in the country in 2023.This marked a 53% surge in leasing by offshoring market in Hyderabad as compared to 4.3 million sq ft in 2022, as per realty consulting firm Knight Frank India’s latest report titled `Asia Pacific Horizon: Harnessing the potential of offshoring’.While GCCs lapped up 4.1 msft space in 2023 in Hyderabad, third party IT services providers took up 2.5 msft space, the report said. Hyderabad’s offshoring market accounted for 32% of the total office space leasing of 27.3 million sq ft across eight offshoring markets in the country.According to Knight Frank, the Indian offshoring market has emerged as a significant occupier of office space in India, accounting for over 46% of space leased in 2023, with GCCs being the biggest offshore occupier with 20.8 msft and third party IT services providers at 6.5msft. Though IT sector remains biggest GCC occupier in India, growth in 2023 was propelled by GCCs from industrial sector, particularly those in semiconductors, automobiles and pharmaceuticals, the report said.Knight Frank India senior executive director (occupier strategy & solutions) Viral Desai said India is poised to have estimated 2,400 GCCs by 2030 as it emerges as a global technology and services hub with numbers slated to scale up to 2,880 by 2034. “The growing share of GCCs in total leases will remain supportive of office market demand in 2024,” he said, adding that India had transformed from a cost-effective centre into a value-adding captive centre. According to Knight Frank global head (occupier strategy and solutions) Tim Armstrong, Asia Pacific offers 70% lower operating costs than US with occupiers expecting to save on an average around $71 per sq ft as compared to mature markets.

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