India's Tech Ecosystem

• Align with tech’s evolving demand: Recognize India's tech sector, with GCCs as the new engine of expansion, remains the primary office demand driver. Proactively align investment and development strategies to cater to GCCs' evolution from cost-arbitrage centres to strategic hubs for innovation and business transformation.

• Embrace a talent-centric location strategy: When choosing office locations, conduct a holistic talent-cost analysis, considering attrition rates, talent pipeline depth, and long-term scalability, rather than just salary levels.

• Leverage emerging cities strategically. Move beyond single-location strategies by utilizing Tier-2 and Tier-3 cities as strategic levers for growth, tapping into burgeoning talent pools and compelling operating cost advantages for diversification and specialized functions.

• Anticipate shifts in urban development: Recognize the growing need for integrated live-work-play environments around office hubs, signaling a move towards strategic 'placemaking' and master-planned, mixed-use developments.

India's tech industry has traversed a remarkable journey, evolving from its initial reliance on cost arbitrage and outsourced back-office functions to emerge as a formidable global technology and innovation hub. What began with global companies leveraging India's low-cost talent pool for low-value tech development and business continuity during crises like the dot-com bubble and Y2K, has blossomed into an exponential growth story. Today, the Indian tech industry is a colossal force, projected to generate a staggering USD 283 billion in FY25 and employing ~5.8 million people. The industry isn’t just reshaping the nation's economic fabric; it is profoundly impacting the nation’s commercial real estate sector.

This impressive ascent is set to continue, with revenues anticipated to exceed USD 350 billon by FY 2029-30 and employment expected to surpass 6.5 million people. While technology services exports will undoubtedly remain a significant contributor to revenue, a crucial catalyst for this growth is the acceleration of domestic revenues. This trend signals a vibrant and maturing internal market, driven by robust government, enterprise, and consumer demand for digital transformation and advanced AI/Generative AI solutions. This strong internal demand, coupled with a flourishing Engineering Research & Development (ER&D) sector, is making the real estate market more resilient to external economic fluctuations by rooting its growth in robust domestic fundamentals. Importantly, as employment numbers swell, the demand for office real estate intensifies, particularly for specialized, technologically advanced workspaces.

While the global economic landscape has seen its ebbs and flows, and the very nature of work has undergone significant shifts, India's technology sector has consistently remained the mainstay of office demand. This is not merely an anecdotal observation but a quantifiable reality. From 2017 through Q1 2025, the sector amassed an impressive 130.8 mn sq ft of gross leasing. This substantial figure underscores its sheer scale and foundational impact on the Indian office market.

The post-pandemic era saw a temporary recalibration, with tech's share of overall leasing dipping from a 2019 high of 38% to 21% in 2023 – a natural market adjustment as other sectors diversified, and hybrid work models evolved. However, tech's swift resurgence to 26% in 2024 and further to 30% in Q1 2025, alongside its consistent double-digit million square feet annual volumes unequivocally demonstrate enduring resilience and strategic importance.

What fuels this persistent, high-volume demand?

Two distinct, yet powerfully synergistic forces: The first is the dominant contribution of foreign tech occupiers, which have commanded a substantial 68% of the cumulative tech gross leasing over the specified period. This dominance stems from the unprecedented expansion of Global Capability Centres (GCCs) in India. Global tech giants actively seek specialized, scalable, and talent-proximate environments for their cutting-edge operations, forming the bedrock of India's tech real estate narrative. The second critical pillar is the robust domestic tech ecosystem. This injects vital resilience into the market, providing a crucial counterbalance to potential global market volatilities. Intriguingly, the top 10 IT services firms in India are collectively responsible for a significant 33% of all domestic tech leasing. This concentration within established domestic leaders signals a well-developed market where scaling Indian enterprises are driving substantial, recurring office demand, often for high-quality spaces that support their expansion strategies and evolving employee-centric work models.The post-pandemic era saw a temporary recalibration, with tech's share of overall leasing dipping from a 2019 high of 38% to 21% in 2023 – a natural market adjustment as other sectors diversified, and hybrid work models evolved. However, tech's swift resurgence to 26% in 2024 and further to 30% in Q1 2025, alongside its consistent double-digit million square feet annual volumes unequivocally demonstrate enduring resilience and strategic importance.

The evolution of India's technology sector has reached a pivotal juncture, marked by the indisputable rise of GCCs as the primary drivers of office space demand. While the initial two decades of India's tech growth were propelled by third-party IT service providers, the last decade has seen a decisive shift towards GCCs. Although direct leasing by traditional tech sector occupiers constitutes a segment of the market, India's profound tech prowess and unparalleled talent pool are now predominantly leveraged through the GCC route.

Our analysis of gross leasing by occupier type reveals a compelling divergence. GCCs collectively delivered 68.1 million sq ft of leasing post-COVID (2022-24), marking an impressive 18.6% growth over the pre-COVID period (2017-19). In stark contrast, leasing by Foreign Tech (exclusive of GCCs) contracted by 21.2% over the same comparative periods. This highlights a strategic realignment as global firms increasingly prioritize in-house capabilities within India via the GCC route. Meanwhile, Domestic Tech showed modest, yet positive growth of 11.9%, which provides a crucial layer of resilience to the overall market.

These figures underscore that while the overall tech sector remains the mainstay of demand, it is specifically the GCC segment that is the new engine of expansion. Occupiers across diverse global sectors – from BFSI and manufacturing to healthcare – are increasingly choosing India as their GCC hub, capitalizing on its unique blend of specialized talent, cost efficiencies, and robust infrastructure. It is crucial to acknowledge that even these robust statistics are conservative, as significant tech-aligned leasing activity also transpires through the flexible workspace route.

The robust growth of GCCs in India, as evidenced by their impressive leasing activity, is not merely a story of quantitative expansion but also one of qualitative evolution. India's GCCs are rapidly moving up the value chain, transitioning from purely cost-arbitrage centres to strategic hubs of innovation, R&D, and global business process transformation. This upward migration is demonstrably reflected in India's services export landscape. While the proportion of software services in the overall services export pie has remained relatively stable, the truly remarkable shift lies in growing share of business services. From 19% in 2017-18, the share of business services in total services exports has consistently grown, reaching 26% in 2023-24. It indicates that India is not just exporting more services, but a greater proportion of these services are high-value, complex, and integral to global business transformation, rather than solely transactional or lower-end IT services.

This strategic pivot towards higher-value, more intricate business services inherently limits their susceptibility to the risks posed by advancements in Artificial intelligence (AI) and automation. While routine, repetitive tasks are indeed vulnerable to AI-driven automation, the core activities of evolved GCCs in India—such as strategic decision-making, complex problem-solving, creative ideation, customer-centric innovation, and highly specialized technical work—require human cognitive abilities that AI currently complements rather than replaces. This means that investing in office space within India for GCC operations is not just about cost efficiency; it's about securing access to a highly skilled, evolving talent pool that is strategically positioned to drive innovation and navigate the complexities of the global digital economy, even in an increasingly AI-driven world. The robust leasing activity by GCCs is a testament to this understanding by global enterprises, who recognize India as a hub for strategic capabilities rather than merely a back office.

The evolution of India's technology sector has reached a pivotal juncture, marked by the indisputable rise of GCCs as the primary drivers of office space demand. While the initial two decades of India's tech growth were propelled by third-party IT service providers, the last decade has seen a decisive shift towards GCCs. Although direct leasing by traditional tech sector occupiers constitutes a segment of the market, India's profound tech prowess and unparalleled talent pool are now predominantly leveraged through the GCC route.

Our analysis provides compelling evidence of this talent-driven pattern across occupier segments.

• GCCs demonstrate a profound and strategic preference for Bengaluru and Hyderabad. This intense concentration, accounting for a combined 64% of GCC leasing, is directly attributable to the large, continuously refreshed pools of high-calibre engineering and digital talent combined with competitive real estate costs and mature Grade A office stock. Bengaluru is home to over 1 million tech professionals, with a significant portion of India's 2 million+ digitally skilled workforce, making it an unmatched ecosystem for complex R&D and innovation. These occupiers strategically choose markets that combine extreme talent density with mature Grade A office stock, creating a powerful value proposition.

• Foreign tech occupiers show a clear preference for Delhi NCR, leveraging the region’s abundant core tech talent, robust infrastructure and proximity to key clients. This pattern is often seen in firms that pre-date the widespread GCC model or have specific business development mandates that benefit from the capital's extensive commercial ecosystem.

• Homegrown tech firms maintain a more distributed presence, reflecting their broad pan-India business footprints and need to access diverse talent corridors. While Delhi NCR, Bengaluru, Chennai, and Hyderabad remain vital hubs, their balanced approach underlines a strategy to access diverse talent corridors. This allows them to support large-scale operations and tap into various skill sets without over-reliance on a single, highly competitive talent pool.

Cities like Chennai, Mumbai, Pune and Kolkata play critical, specialized roles. Mumbai emerges as a magnet for BFSI and management talent within the tech domain. Pune and Chennai serve as deep hubs for specialized R&D, ERP implementation, and product development. In every instance, leasing decisions in these markets are tightly coupled with the availability of relevant, niche talent, showcasing a precision-driven location strategy that looks beyond raw numbers to skill-specific ecosystems.

Furthermore, India’s Tier-2 and Tier-3 cities are rapidly building formidable talent credentials. Cities like Ahmedabad, Kochi, Coimbatore, Indore, Jaipur and Chandigarh collectively contribute a digitally skilled workforce exceeding 100,000. Remarkably, more than 190 GCCs units have already established operations in these emerging locations. This expanding, cost-effective talent landscape empowers organizations to deploy distributed, multi-city models, providing significant advantages in:

• Risk diversification: Reducing dependence on a single metropolitan area

• Cost optimization: Talent pool costs are 25-30% lower and office rental costs are ~50% lower than in Tier-1 cities

• First-mover advantage: Securing a foothold in untapped markets with lower attrition rates and less competition for talent

The profound and evolving influence of India’s technology sector dictates an imperative for all stakeholders in commercial real estate; office location decision-making is now a sophisticated exercise in labour analytics and future talent mapping, demanding a meticulous alignment of physical footprint with the realities of technical specialization, innovation needs, and robust business continuity.

Strategic takeaways for occupiers

• Prioritize a holistic talent-cost analysis: A market's true value extends beyond mere salary levels; it is a holistic function of attrition rates, the depth of the talent pipeline, and long-term scalability. This comprehensive view illuminates why Tier-1 hubs like Bengaluru and Hyderabad consistently command high leasing volumes from GCCs, delivering exceptional value-driven outcomes despite higher absolute costs. A "workforce-first" analysis must lead location choice, prioritizing access to specialized talent hubs for engineering, ER&D, and advanced digital skills to ensure long-term operational resilience.

• Embrace flexibility and futureproofing: The era of monolithic, single-location strategies is yielding to sophisticated hybrid and "hub-and-spoke" models. Forward-thinking companies are strategically leveraging core metros for innovation while deploying high-potential Tier-2 and Tier-3 cities to build resilience, inject agility, and ensure business continuity. This approach allows organizations to create a diversified and responsive real estate portfolio that can adapt to changing market dynamics.

• Recognize that talent creates a self-reinforcing ecosystem: The dominant share of GCC leasing in established hubs is a powerful testament to the self-reinforcing loop initiated by talent magnetism. A critical mass of skilled professionals attracts more global companies, which in turn draws even more talent, fuelling market resilience and sustainable, long-term value creation within these ecosystems.

• Leverage emerging cities are strategic levers: Beyond de-risking, Tier-2 and Tier-3 cities are emerging as strategic levers for growth, armed with burgeoning talent pools and compelling operating cost advantages. Organizations focused on diversification and accessing untapped talent will find a significant strategic advantage in these locations, which are becoming increasingly vital for digital, R&D, and specialized functions. Early movers can lock in significant cost and talent advantages, creating a long-term competitive moat.

Ultimately, organizations are best positioned for success when their location strategy is driven by granular, hard data on talent pools, skill specialization, and ecosystem maturity, rather than by headline rent levels alone. India's tech-driven office markets will continue to be defined by this dynamic relationship between occupier needs and talent access.

Strategic takeaways for landlords and investors

• Address obsolescence: When planning capital outlays, investors must proactively address the multiple dimensions of obsolescence from the perspective of a modern tech occupier, which increasingly demands specialized, technologically advanced workspaces. This extends beyond age and design to include digital infrastructure, regulatory compliance, and collaborative environments suited for innovation. Assets failing to meet these contemporary standards will face significant value discounts and elevated vacancy rates as premium tech tenants migrate to premium assets.

• Anticipating shifts in urban development: The fluidity of tech-driven office demand is profoundly reshaping spatial development patterns. As tech talent increasingly seeks integrated live-work-play environments, there is a growing need for co-located residential and retail infrastructure clustered around office hubs. This trend signals a move towards strategic 'placemaking'—the creation of new, self-sufficient urban centres or the comprehensive regeneration of existing ones through large-scale, master-planned, mixed-use developments.

• Identifying priority locations for future investment: The growth of GCCs and the persistent demand for premium Grade A spaces directly influence which major tech cities will remain priority investment locations. Bengaluru, Hyderabad, Pune, Chennai, Delhi-NCR, and Mumbai are poised to continue attracting significant capital due to their established talent pools, robust infrastructure, and supportive ecosystems. Furthermore, the strategic emergence of Tier-2 cities as talent hubs presents unique opportunities for diversified portfolios and early-mover advantage.

• Plan for emerging asset classes: Beyond office real estate, the long-term growth trajectory of the technology sector inherently generates exponential demand for specialized, often complementary, asset classes. Data centres, driven by accelerating digitalization and AI adoption, represent a direct consequence of tech growth. Similarly, student accommodation is inextricably linked to the continuous supply of tech talent, and specialized labs cater to deep tech R&D. Exploring and strategically allocating capital to these alternative asset classes will offer differentiated risk-return profiles and robust long-term growth potential, underpinned by the expanding tech ecosystem.

In conclusion, India's tech-driven office markets are dynamic ecosystems where real estate success is predicated on a deep understanding of talent flows and technological imperatives. The path forward mandates tying workspace strategy indelibly to talent density, specialization, and the evolving needs of a globally competitive tech landscape, ensuring not just market relevance but sustained value creation for all stakeholders.