Foreign BFSI Firms Drive Record GCC Office Leasing in India During H1, Knight Frank Reports

Foreign banking, financial services, and insurance (BFSI) firms have emerged as the primary drivers of office space demand for global capability centres (GCCs) in India. According to a report by real estate consultant Knight Frank India, gross leasing by foreign BFSI firms touched a record 7.32 million square feet in the January-June period.

This figure represents a 70 percent increase from 4.31 million square feet recorded in the year-ago period. The transactions spanned across eight major Indian cities, namely Mumbai, Delhi-NCR, Bengaluru, Pune, Hyderabad, Chennai, Ahmedabad, and Kolkata.

During the first half of the year, the BFSI sector contributed 36 percent of the overall leasing of 20.6 million square feet for GCCs across these leading eight cities.

Commenting on the trend, Viral Desai, International Partner and Senior Executive Director at Knight Frank India, stated that the commercial real estate market is witnessing a clear structural shift. He noted that GCC-led demand is becoming increasingly diversified beyond traditional technology occupiers, with the surge in BFSI-led transactions underscoring the sector's growing appetite for high-quality office spaces.

In contrast, leasing by foreign IT-ITeS companies to set up GCCs fell 28 percent to 4.13 million square feet in the first six months of the year, compared to 5.71 million square feet in the corresponding period last year. Desai explained that the moderation in IT and ITeS absorption reflects a period of recalibration as occupiers realign their global strategies.

Data also showed that leasing of office spaces by global manufacturing companies to set up GCCs declined to 4.05 million square feet from 4.67 million square feet. Meanwhile, office space leasing by other service companies rose to 5.10 million square feet from 4.41 million square feet during the period under review, pointing to a broader expansion of India's services economy.

Mukesh Choudhary, Managing Director at Accuspace, noted that India's GCC ecosystem is entering a decisive phase of expansion. He added that state-level policies, a skilled workforce, incentives, and infrastructure commitments are creating a strong pipeline of new centres and employment, which is likely to sustain demand for quality office space across established hubs and emerging markets alike.

"The significant rise in GCC office leasing by foreign BFSI firms demonstrates the changing landscape of India's commercial real estate and service sectors. While traditional technology and manufacturing occupiers are currently recalibrating their global strategies, the financial services sector is stepping up its investments in India's skilled workforce and infrastructure. This diversification is a positive indicator of the resilience and depth of India's business ecosystem, creating sustained demand for commercial real estate across multiple urban hubs." — Dr. Shishir Gupta, Founder & CEO, StartupLanes