A new study by CREDAI and Colliers has found that India‘s real estate sector is increasingly embracing sustainability, with around two thirds of Grade A office stock in the country’s six largest cities now environmentally-certified.
The Sustainability in Real Estate: Towards a Greener Skyline report found that green building adoption is ‘accelerating’ across all real estate segments in India, driven by energy savings, rental premiums and emissions reduction.
Green building practices
“India has set ambitious climate targets, including achieving net-zero emissions by 2070 and reducing carbon intensity to less than 45% by 2030,” commented Shekhar G Patel, president, CREDAI. “Real estate, being a significant contributor to carbon emissions, has the potential in advancing these goals through green building practices, usage of energy-efficient technologies, and renewable energy integration. This shift has already gained momentum in the sector, with green building adoption increasing across residential, commercial, and industrial spaces.
“Developers, investors, and occupiers are increasingly prioritising sustainability through green certifications, energy-efficient construction, and ESG-driven strategies. As the sector moves towards greater adoption of environmentally responsible practices, collaboration amongst stakeholders will be pivotal in upcoming years.”
Increased footprint
Overall, the green building footprint in India has nearly doubled over the past five years, to reach 13 billion square feet as of 2024, the report noted. Green office inventory is expected to reach approximately 700 million square feet by 2027.
Other findings from the report include that the proportion of leasing in green-certified buildings is expected to rise to between 80% and 85% over the next few years, up from around 75% currently.
Rental premiums are as much as 24% higher in green-certified buildings.
In addition, an investment potential of around INR 425 billion (around $5 billion) is likely to emerge from retrofitting older office buildings, while another INR 22–23 billion opportunity exists in upgrading part of newer buildings.
‘Significant opportunities’
“With green buildings being most prevalent in the Indian office market, the segment holds significant opportunities for developers and investors,” added Badal Yagnik, CEO, Colliers India. “Retrofitting existing buildings with sustainable elements can improve energy efficiency and prolong the lifespan of structures, making them more attractive for occupiers.
“Simultaneously, rising environmental consciousness amongst end-users across all real estate segments presents multiple opportunities for developers and investors to capitalise on the growing market for green buildings. As we move towards a greener future, it is essential for stakeholders including developers, occupiers, policymakers, and investors to collaborate in accelerating the transition towards a more sustainable built environment.”
Green certification is becoming a baseline expectation for the real estate sector in India, rather than a differentiator, as the report notes. Read more here.
