A total of 321 million sq ft of Grade-A office stock is green certified in India. This is 43.8% of the total stock of 732 million sq ft spread across seven cities, as of March 2022, as per JLL.
The seven cities are Mumbai, Delhi NCR, Bengaluru, Chennai, Hyderabad, Pune, and Kolkata. Delhi NCR leads the overall share of green-certified stock in the country with approx. 67 mn sq. ft, closely followed by Mumbai with approx. 66 mn sq. ft. Collectively, Mumbai and Delhi NCR account for 41.2% of the total, green-certified stock in the country.
When it comes to individual city-level penetration of green buildings, Kolkata has the highest penetration level of 59.5% because of a low stock base and Hyderabad comes in at 52%. Bengaluru, Mumbai, Delhi NCR, and Hyderabad are the top four cities in terms of overall Grade-A office stock and account for over 3/4th of the existing green footprint.
Institutional investors including REITs hold 220 mn sq ft of Grade-A office stock, which is about 30% of the country’s overall office stock. Of this, over 79% or 175 mn sq ft is green-certified. Going green has its advantages. There is a 13.2% average rental premium in Green certified IT buildings and a 36.1 % average premium in non-IT buildings.
India’s Grade-A stock is predominantly of IT/IT SEZ usage, with such projects holding a 71.4% share. The penetration levels of green certification are also significantly higher with 50% of this IT/IT SEZ stock being green certified.
On an overall basis, IT/IT SEZ projects account for 81.5% of all green-certified Grade-A buildings in the top seven cities. Non-IT projects have a lower share in India’s Grade-A stock as they include substantial older stock in cities’ CBDs which is in urgent need of refurbishment and upgradation, including improvements to make it more sustainable.
It is likely that the upcoming supply is green-rated to an extent of 70-75% even as older projects look to upgrade and reduce their carbon footprint. As a result, over the next decade, we expect the penetration levels of green-certified buildings to cross the 50% on an overall basis.
