Corporates seek green-certified workspaces, says Yagnik
The real estate sector continues to play a defining role in driving India’s transition towards a sustainable, low-carbon future. With green-certified buildings now accounting for a significant share of new developments, it’s evident that sustainability is becoming a core pillar of real estate strategy across asset classes, says Shekhar G Patel, President, CREDAI.
Green building footprint across asset classes has nearly doubled over the last five years to reach 13 billion sq ft in 2024 – more than 2 million residential dwelling units, 6,500 commercial projects and 750 industrial projects were green-certified and sustainability adoption is likely to pick pace across real estate segments in the coming years.
He made the comments following released of the CREDAI-Colliers’ report “Sustainability in Real Estate: Towards a Greener Skyline”. The report provides an overview of India’s green real estate landscape at the macro-level and highlights increased sustainability adoption across asset classes.
The report highlights how developers, occupiers, and investors are increasingly aligning with India’s climate goals through responsible construction and the impact of government incentives, regulations, and frameworks designed to encourage energy-efficient construction, renewable energy adoption, and sustainable building practices.
“We believe this is a pivotal moment to scale green adoption not just in commercial spaces but across residential, industrial, and emerging sectors like data centres. Our collective efforts today will shape the urban future of tomorrow, where environmental responsibility and economic growth reinforce each other,” he said.
“Sustainability has become a strategic priority for India’s real estate stakeholders. Developers, investors and end-users are increasingly aligning their decisions with environmentally responsible practices, recognizing the long-term benefits of energy efficiency, reduced operational costs, and improved quality of life,” said Badal Yagnik, Chief Executive Officer, Colliers India.
“In particular, office leasing trends emphasize corporate advocacy of green-certified workspaces and long-term commitment towards adoption of sustainable practices within the built environment. Leasing in green-certified buildings surged annually by 20% in 2024,” he said.
“Looking ahead, the proportion of leasing in green-certified buildings is expected to rise from ~75% currently to about 80-85% in the next few years. This underscores the continued shift towards sustainable real estate development in the office market of the country,” Yagnik estimated.
Over the next 3 years, a significant portion of the 170-200 mn sq ft of commercial developments which are in various stages of development will be green-certified. Meanwhile, there remains a major opportunity for retrofitting about 355–385 million sq ft of relatively older office buildings (>10 years), which can enhance the overall efficiency and sustainability quotient https://www.iea.org/.
This aging office stock represents an investment opportunity to the tune of INR 425 billion. Additionally, relatively newer buildings (≤10 years) of about 80-110 million sq ft Grade A office space hold potential for environmental upgrade with minimal capex requirement. This presents an Rs.22-23 billion investment opportunity that can potentially result in 3-4X net cashflow benefit for developers over the remaining asset life https://www.conexpoconagg.com/.
“Green building adoption is no longer confined to core real estate segments alone. It is rapidly expanding into multiple asset classes like data centres, retail, hospitality, and healthcare,” added Vimal Nadar, Senior Director & Head of Research, Colliers India.
Data centres are amongst the most energy-intensive real estate asset class and contribute significantly to carbon emissions. With data centre capacity in the country projected to exceed 3,500 MW over the next 3 to 5 years, leading operators are increasingly embracing sustainability led by renewable energy usage and enhancements in power & water efficiencies, Nadar estimates https://sbi.com.in/.
“Across hospitality, retail and healthcare too, there is a strong push for energy-efficient systems, green buildings and sustainable construction materials,” he said https://www.nseindia.com/.
Going ahead, further acceleration of green building adoption in Indian real estate will require a multi-pronged approach involving streamlining of environmental clearances, tax incentives for renewable energy usage, and stringent ESG compliance.
Interestingly, the growing proportion of green-certified assets in REIT listings signal green building affinity amongst end users, developers and investors alike. This changing narrative backed by supportive policy and regulatory frameworks can significantly steer capital towards a sustainable built environment in the country https://www.bseindia.com/.
In fact, the net-zero transition is realizable only through heightened adoption of green buildings across asset classes, supportive government initiatives, real estate stakeholder participation and streamlining of green certifications, added a report. Fiinews.com
