Multinational life sciences companies are flocking to southern India, driving record office leasing projected to reach 4 million square feet in 2024. Major investments and government support for R&D infrastructure are solidifying India's position...
Multinationals are rushing to southern India to set up global capability centres (GCCs) in life sciences, with office leasing by these firms likely to touch a record 4 million square feet in calendar 2024, according to realty consulting firm CBRE.
Over the last five years, companies clocked 70% surge in office leasing across eight cities in the region, with AstraZeneca's ₹250 crore expansion in Chennai, Sanofi's ₹3,600 crore GCC expansion in Hyderabad, and Medtronic's ₹500 crore investment in its first IT centre outside the US counting among the major investments.
"Global corporations are expanding their research and development facilities. The development of specialised infrastructure, such as bulk drug parks and pharmaceutical cities, is anticipated to catalyse this expansion further, solidifying India's position as a global innovation hub," said Anshuman Magazine, chairman & CEO-India, Southeast Asia, Middle East & Africa at CBRE. He said this "growth trajectory is projected to stimulate demand for high-quality, specialised office spaces, thereby diversifying India's office market."
During the first nine months of 2024, life sciences emerged as the sixth-largest contributor to office leasing activity, with GCC operations comprising 66% of the sector's demand. Hyderabad led the market, capturing nearly half of the total absorption, followed by Bengaluru and Chennai.
Built-to-suit projects, such as those at Genome Valley in Hyderabad and pharma cities, are also on the rise, supported by increased government healthcare expenditure and a skilled workforce, positioning India as a global R&D and innovation hub.
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"Pharma GCCs will establish their own clusters, and South India, including Bengaluru and Hyderabad, will have an edge due to existing infrastructure. Genome Valley, being the first cluster in India, has encouraged the government to make it competitive for GCCs by investing in housing townships, improving urban infrastructure, and acquiring more land parcels for the expansion of Genome Valley," said Vishal Goel, MD, RX Propellant, a life sciences real estate development firm.
