Sustainability is reshaping India’s commercial real estate market, with green-certified Grade A office spaces now dominating leasing activity across major cities. Data from early 2025 reveals a surge in demand for eco-friendly offices, reflecting growing corporate commitments to environmental, social, and governance (ESG) goals.
Growth of Green-Certified Office Stock
According to research, India’s Grade A green-certified office space inventory has grown by 65% since 2019, reaching approximately 530 million square feet by the first half of 2025. These buildings now constitute about 61% of the total 865 million square feet of Grade A office stock across key markets, including Bengaluru, NCR, Mumbai, Hyderabad, Chennai, Pune, and Kolkata.
Strong Leasing Trends in Green Buildings
Leasing activity in the first half of 2025 further highlights the preference for green-certified offices. Over 74% of the 26.85 million square feet of office space leased in major cities was in eco-certified buildings. Bengaluru led the pack, with 80% of its leased office space being green-certified, closely followed by Chennai, NCR, and Pune. Kolkata, however, remained an exception with only 7% of leasing in green-certified properties.
Premium Rentals and Lower Vacancy Rates
Green-certified office spaces command a rental premium of up to 24% compared to conventional Grade A offices. They also maintain significantly lower vacancy rates, around 14%, underscoring tenants’ willingness to invest more in sustainable environments that reflect their corporate values and improve employee well-being.
Drivers Behind the Shift
The market’s shift arises from a mix of government initiatives targeting net-zero emissions by 2070, corporate sustainability mandates, and rising awareness among tenants. Notably, multinational corporations (MNCs) and Global Capability Centres (GCCs) now predominantly demand workspace features aligned with sustainability certifications such as LEED, IGBC, and GRIHA.
Looking Ahead: The Future of Office Leasing
Sustainability is becoming a strategic advantage rather than a regulatory burden. Companies are increasingly prioritising green building certifications and sustainable fit-outs to align with ESG goals. This demand trend is expected to continue, pushing developers to incorporate green features, energy efficiency, and wellness amenities like natural lighting and biophilic design.
The FlexInsights Take
India’s commercial real estate market is witnessing a profound transformation where green-certified Grade A offices are no longer niche but mainstream. Investors, developers, and occupiers must recognise sustainability as a key differentiator driving leasing growth, rental premiums, and tenant satisfaction in the evolving workplace landscape.
