Cost cuts: IT companies share in real estate shrinks

CHENNAI/ BENGALURU: The IT services sector is slowing down on real estate absorption due to a combination of weakening business, adoption of a hybrid work model, and re-allocation of talent to tier-2 satellite offices. However, that slack is being picked up by global capability centres (GCCs) of MNCs and product firms – companies whose numbers are growing and who seem more particular about in-person collaboration. GCCs are offshore units that provide support services like IT, finance and analytics to their parent organisations.

Data from property research firm Anarock shows that the share of IT-ITeS (IT-enabled services) firms in total office space across the seven major cities reduced about 24% in Q1 2023 from 42% in 2019. Simultaneously, there is a rise in the share of GCCs.