India Emerges as Global Offshoring Hub, Driving Surge in Office Space Demand: Knight Frank Report
India Emerges as Global Offshoring Hub, Driving Surge in Office Space Demand: Knight Frank Report
International companies sending work to India are playing a big role in the need for office space in the country. A report by real estate experts Knight Frank shows that these companies, along with Indian firms providing IT services, made up nearly half of all the office space leased in 2023.
Knight Frank’s report, titled ‘Asia Pacific Horizon: Harnessing the Potential of Offshoring,’ highlights how India has become a major player in global offshoring. Offshoring is when businesses send tasks or services to other countries to save money and access specialized skills.
In India, offshoring comes in different forms, including Global Capability Centres (GCCs) and Global Business Services (GBS). GCCs are units set up by companies in other countries, while GBS involves centralized service units providing services worldwide.
Last year, India saw a significant increase in offshoring-related office leasing, reaching 27.3 million square feet, up by 26% from the year before. This includes various services like IT outsourcing, research, and other service processes.
India hosts around 42% of the world’s companies that outsource their work here. This industry is a massive contributor to India’s economy, accounting for about 60% of service exports in 2023, which has grown threefold since 2013.
The report underlines that India’s offshoring industry is a major player in the office space market, leasing over 46% of all office space in 2023. GCCs alone accounted for 20.8 million square feet, showing significant growth.
These centres are not only dominated by the IT sector but also by industries like semiconductors, automobiles, and pharmaceuticals. Viral Desai from Knight Frank India says India’s policies and skilled workforce have made it a preferred destination for offshoring.
Desai predicts that by 2030, India will become a global hub for technology and services, with around 2,400 GCCs. This trend is also boosting office demand in other countries like the Philippines, Malaysia, and Vietnam.
