GCC’s – How to meet your office needs

I was discussing options with a potential company that is planning to open a new office in India. My reflections from my experience.

The type of office space depends on the scope of the project.

If one is starting from scratch and building the team from zero, then it’s better to move into a co-sharing/managed space till a certain scale has been reached.
If however, you already have a team that is being relocated or repurposed or has a very clear transition and ramp-up plan with a confirmed forecast on headcount number, one can assess moving into your greenfield or fitted-out office.

Managed space – the advantage is in flexibility, world-class standards, fully supported service in terms of IT Infra, Maintenance, etc., and possible interactions with other companies in the same space. Cons – price point especially additional charges for meeting rooms, however, today many players are quite cost-competitive. Best suited for sub-150 teams.

Your own office – cost effective in the long run (CAPEX amortized over 5 years), customized to your needs where one can plan for additional meeting rooms, higher levels of security, and improved brand visibility/employee experience, more suited for larger 500+ teams. Today, many developers are willing to pick up the CAPEX cost which supports one’s initial outflow of funds.

Space per full-time employee 90sq feet to 130sq feet – Own (Conventional Office) Space.

(a higher number co-relates to increased open spaces, which results in a more premium feel)

Approx Infra cost (warm shell fitout + IT assets and infra) = Rs 2500-4500 per sq foot

Lets compare

A – Co sharing Grade A supplier, Metro (e.g. Bengaluru) – Rs 22,000/- per seat.

100 seats per annum = 22,00,000*12=2,64,00,000 or 26.4million rupees

The above does not include meals, transport, or other sundry expenses.

B – Own office 100 FTE = 100SqFoot * 100 = 10000sq feet of space required.

Cost of fitout – CAPEX one time = 10,000*3000=3,00,00,000 = 30million rupees

Rentals including CAM (Common Area Maintenance+ Electricity) = 100 per sq foot

Rentals per year = 10,000*100*12 =1,20,00,000 = 12 million

OPEX per month (electricity, housekeeping, security) = Rs 35 per sq foot = 35*10000*12=4.2 million

5 year cost analysis

	A	B
One Time	0	30
Rentals	26.4*5	12*5
OPEX		4.2*5
Grand Total	132million	81million

*numbers are approximates

**some elements not captured as the impact across both is similar e.g. IT hardware.