India’s commercial real estate sector is transforming as companies seek eco-friendly office spaces. With sustainability, energy efficiency, and ESG compliance becoming corporate priorities, developers are integrating green-certified designs to meet the growing expectations of multinational corporations and IT-driven industries.

The Shift Towards Environmentally Responsible Office Spaces

A report by Crisil Ratings reveals that Global Capability Centres (GCCs) and IT/ITeS companies, accounting for 50-60% of total office leasing, champion sustainability. These organisations align their leasing decisions with Environmental, Social, and Governance (ESG) standards, ensuring their workplaces adhere to strict environmental benchmarks.

Real Estate Developers Lead the Sustainability Drive

Real estate developers are embedding sustainability into their core projects to meet this demand. Most Grade A commercial buildings currently under development incorporate:

• Advanced energy-saving technologies

• Eco-conscious construction materials

• Sustainable architectural designs

According to a Crisil Ratings study, nearly all upcoming office buildings in their research sample qualify for green certification, indicating a widespread industry shift.

Balancing Upfront Costs with Long-Term Gains

While green-certified office buildings require an additional 3-5% investment compared to conventional spaces, they offer significant operational savings. Features like solar energy adoption, water recycling systems, and high-performance insulation help cut long-term expenses.

Gautam Shahi, Director at Crisil Ratings, highlights the financial benefits:

“Though green buildings typically incur a 3-5% higher upfront construction cost compared with traditional buildings, tenants are willing to pay a slight premium as rentals in India remain globally competitive.”

He adds, “Green-certified office spaces enhance the overall employee experience and generate long-term cost savings for businesses. Lower energy and water consumption can lead to up to 30-35% reductions in utility costs, making them an attractive investment for corporate tenants.”

How IT Giants & MNCs Are Powering the Green Revolution

With GCCs expected to drive a substantial portion of new leases in the coming years, developers are swiftly adopting eco-friendly innovations in their projects. Pranav Shandil, Associate Director at Crisil Ratings, emphasises this trend:

“As this movement towards sustainable offices continues, developers with a higher proportion of green-certified buildings will see better business risk profiles. Multinational corporations are increasingly choosing environmentally responsible workspaces, even if it means paying slightly higher rentals.”

For both developers and tenants, prioritising sustainability aligns with global environmental goals and enhances ESG scores, which are crucial in securing investment opportunities.

Government Push & Green Investment Funds: Driving Sustainable Growth

Although green real estate investment funds are still emerging in India, they present massive potential for financing sustainable projects. These funds enable developers to access affordable capital, making eco-friendly office spaces a financially viable choice.

To further accelerate the adoption of sustainable buildings, the government is offering multiple incentives, including:

• Higher Floor Area Ratio (FAR): Allows more significant developments while adhering to sustainability standards.
• Subsidies & Tax Breaks: Developers investing in green-certified construction can avail of financial benefits to offset higher initial costs.
• Expedited Approvals: Fast-tracked regulatory clearances for projects meeting green certification requirements.

The Road Ahead: Why Sustainability Is the Future of Corporate Spaces

With the increasing adoption of green building certifications, India’s commercial real estate market is experiencing a pivotal shift. The preference for energy-efficient workspaces by GCCs, IT firms, and global corporations is redefining leasing trends and making sustainability a competitive advantage.

Developers who embrace sustainability are well-positioned to attract premium tenants, gain a market edge, and contribute to India’s environmental sustainability mission.

As companies prioritise eco-conscious offices, India’s commercial real estate industry is set to lead in building a greener, more responsible future.