At the 3rd Realty+ Harit Bharat Leadership Summit & Awards 2025, a power-packed panel discussion moderated by Abbishek Sharma, Executive Director, Commercial Leasing & Advisory, Anarock Property Consultants Pvt. Ltd, examined the seismic shift in India’s commercial real estate market where green buildings are no longer optional, but a core leasing criterion. Joining him were industry leaders Navinder Narang, Head, Infrastructure Facilities & ESG, ICICI Home Finance; Senthilraj Balachandran, Sr. VP, Head of MEP & Sustainability, K Raheja Corp; and Nitin Gupta, Head Technical–RMX, Nuvoco Vistas Corp. Ltd.; Dr. Mala Singh, Chairperson, IGBC Mumbai Chapter, Rajco Metal Industries Pvt. Ltd. and Tripti Agarwal, Sr. Vice President, Commercial Transactions & Growth Strategy, Century Real Estate Holdings Pvt. Ltd.
Growth and Demand for Green Buildings in India
India’s green building movement has witnessed extraordinary growth over the past two decades. From just a single certified building in 2001, the Indian Green Building Council (IGBC) has now certified projects covering more than 14 billion square feet. These span commercial, residential, healthcare, and infrastructure sectors, demonstrating how sustainability has moved from niche to mainstream in the country’s-built environment.
In the commercial segment, the momentum is particularly strong. In the first half of 2025, 65–70% of all office leasing involved green-certified assets. The total green commercial supply has now surpassed 500 million square feet, indicating the market’s deep shift toward sustainable infrastructure. This trend is not merely cosmetic—it is driven by tenants’ strategic priorities.
Global Capability Centers (GCCs), IT/ITeS companies, multinational corporations, and leading service providers are increasingly prioritizing green spaces to meet net-zero targets, ESG mandates, and brand reputation goals. More than 75% of requests for proposals (RFPs) now explicitly include sustainability criteria such as renewable energy integration, advanced energy-efficiency measures, and indoor environmental quality benchmarks.
The willingness to invest in sustainability is clear: 68% of global brands operating in India have pledged to occupy only green-certified offices. Tenants are prepared to pay up to a 10% “green premium” on rentals, while non-green or “brown” buildings are facing a 5% higher annual vacancy rate and greater rental discounts. This shift marks a fundamental redefinition of asset value in the property market.
Drivers of Demand
The demand for green buildings in India is shaped by both push and pull factors. Initially, the “push” came from regulatory frameworks and investor requirements. For example, the Securities and Exchange Board of India (SEBI) introduced the Business Responsibility and Sustainability Reporting (BRSR) framework for the top 1,000 listed companies, encouraging transparent disclosure on environmental performance. Similarly, global investors increasingly favor assets aligned with limited partner (LP) sustainability mandates.
However, the market is now seeing a strong “pull” from occupiers themselves. Corporates—both multinational and domestic—are actively seeking green-certified properties, sometimes at the cost of location convenience. A telling example is ICICI Bank’s decision to choose a green office 2–3 km away over a closer, non-certified building in order to enhance its brand positioning.
The COVID-19 pandemic also altered perceptions, accelerating the shift toward healthier, more resilient workplaces. Indoor air quality, thermal comfort, natural light, and eco-friendly materials have become essential considerations, not just optional features. In this new reality, green buildings are seen as crucial for both operational resilience and employee well-being.
Benefits and Value Addition
Green building certifications are delivering tangible, measurable benefits. They go far beyond buzzwords or ESG checkboxes in annual reports. Certified properties typically see reduced operational costs, higher occupancy rates, and stronger alignment with corporate net-zero aspirations.
Innovations are playing a major role in shaping the next generation of green buildings. Material advances such as anti-microbial putty, eco-durable green concrete, and thermal-insulated concrete are improving building performance and occupant health. On the design front, mechanical, electrical, and plumbing (MEP) systems optimized for energy efficiency are becoming standard in premium developments.
Performance data reinforces the value proposition: depending on the asset type, green buildings can achieve 11–77% better energy performance compared to baseline buildings. This is particularly significant for energy-intensive facilities such as laboratories and data centers.
Challenges and Market Evolution
Despite the rapid growth, green certification is not yet a universal deal-breaker for all occupiers though it is rapidly becoming one. In some cases, tenants still consider high-quality non-green buildings, but this flexibility is shrinking as sustainability expectations rise.
A lingering challenge is the perception of higher initial costs. While sustainable buildings often require an upfront premium, the long-term operational savings especially in energy and carbon reduction—significantly outweigh these early expenses.
Importantly, the market is now entering a maturity phase. Where the conversation once centered on paying a “green premium” for certified buildings, the dynamic is shifting toward “brown discounting.” In this emerging reality, non-green assets risk losing value, tenants, and relevance. This is a clear signal for developers and investors: sustainability is no longer a differentiator—it is the baseline.
