India’s commercial real estate sector is shifting towards certified green buildings as global tenants demand sustainable office spaces. Despite a 3-5% higher upfront cost, green offices offer up to 35% energy savings. With ESG priorities shaping leasing trends and government incentives boosting adoption, sustainable workspaces are the future of CRE.
The demand for certified green buildings is reshaping India’s commercial real estate (CRE) sector, driven by sustainability commitments from global corporations. Grade A office spaces, particularly in IT/IT-enabled services (ITeS) and Global Capability Centers (GCCs), now prioritize eco-friendly, energy-efficient workplaces to align with environmental compliance needs.
“Almost the entire upcoming supply for Crisil Ratings’ sample set is expected to be green certified,” said Crisil Ratings, highlighting the industry’s decisive shift toward sustainability. Currently, these companies account for nearly 50-60% of net office leasing, reinforcing the need for green infrastructure in the sector.
Despite green buildings incurring 3-5% higher upfront construction costs than conventional office spaces, the long-term benefits outweigh the initial investment. “Tenants are willing to pay a slight premium as rentals in India are still globally competitive,” said Gautam Shahi, Director at Crisil Ratings. Integrating energy-efficient technologies and sustainable materials reduces water and energy usage, cutting tenant utility expenses by 30-35%.
As global firms prioritize Environmental, Social, and Governance (ESG) targets, Indian developers are responding by increasing their green-certified office portfolios. “The growing prominence of green buildings is evident from ~95% of assets rated by Crisil Ratings achieving green certification,” said Pranav Shandil, Associate Director at Crisil Ratings. Nearly 100% of office Real Estate Investment Trust (REIT) stocks are now green-certified, further emphasizing the shift towards sustainability.
The financing landscape is also evolving to support eco-friendly projects. While green-focused investment funds remain in their early stages in India, their expansion could provide developers with more affordable financing options. Additionally, government incentives such as increased Floor Area Ratio (FAR) and state-backed subsidies make green building projects more viable.
As India accelerates its commitment to environmental sustainability, commercial real estate will be greener than ever. With growing investor interest, regulatory support, and tenant demand, certified green workspaces are becoming an industry standard rather than an exception.
Leave a Comment
You must be logged in to post a comment.