Most of the Grade A office demand today is for certified green buildings, as tenants - specifically global capability centres (GCCs) and Information technology (IT)/IT-enabled services (ITeS) companies, which account for 50-60% of net office leasing — are increasingly looking to occupy green and sustainable spaces amid rising environmental compliance needs and awareness.
The shift towards sustainable buildings is particularly relevant in India, where GCCs are expected to drive significant portion of net leasing over the next two fiscals. As global corporates prioritize their environmental, social, and governance (ESG) targets, Grade A developers are responding by developing green buildings to maintain high occupancy and healthy rentals.
The growing prominence of green buildings is evident from ~95% of assets rated by Crisil Ratings achieving green certification as of September 30, 2024, and nearly 100% of office Real Estate Investment Trust stock being green certified. As this trend continues, developers with a higher proportion of green buildings will see better business risk profiles as multinational tenants increasingly occupy these high-quality, environmentally responsible spaces even at slightly higher rentals. Further, this shift towards sustainability is helping both tenants and developers improve their ESG metrics.
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