India's built environment is increasingly stepping up decarbonisation efforts to achieve sustainability goals. Rising environmental awareness, stricter regulations, and sustainability goals are accelerating the pace of green building adoption in the country. Overall, the green building footprint across asset classes has nearly doubled over the last five years to reach 13 billion sq ft in 2024. As of 2024, more than 2 million residential dwelling units, 6,500 commercial projects and 750 industrial projects were green-certified, and sustainability adoption is likely to pick pace across real estate segments in the coming years.
The CREDAI-Colliers's report provides an overview of India's green real estate landscape at the macro level and highlights increased sustainability adoption across asset classes. In the office segment, two-thirds of Grade A stock in the top six cities was green-certified, at 503 million sq ft by the end of 2024.
With the majority of the upcoming commercial developments expected to become sustainable from the outset, the green-certified Grade A stock in the country can reach close to 700 million sq ft over the next 2-3 years. In the residential segment, heightened green building adoption was indicated by over 2 million green-certified homes and 60+ certified townships (2024). Sustainable houses typically offer tangible benefits through lower utility bills, better air quality, and 5–10% rental premiums. Green adoption is also gaining ground in industrial, healthcare, retail, hospitality, and data centre segments. Developers and occupiers increasingly opt for sustainable, energy-efficient buildings to align with climate targets and net-zero commitments.
As of 2024, green-certified office stock in India stood at about 503 million sq ft, representing 66% of the total Grade A inventory across the top six cities. The ~40% rise in green office stock since the beginning of the decade reflects developers' commitment to the evolving market scenario and the resultant occupier preferences. Bengaluru accounted for 31% of India's green-certified office stock, followed by Delhi NCR (19%) and Hyderabad (17%). In terms of green penetration, which is indicated by the share of green-certified buildings in each city's total Grade A office stock, Hyderabad led other major markets with a penetration rate of 75%, closely followed by Bengaluru with 73% in 2024.
On the supply front, over the last 5 years (2020-2024), about 80% of the new Grade A office supply has been green-certified. A clear shift in occupier preferences has driven the surge in green building supply, with ~75% of leases in 2024 being transacted in green-certified buildings. Overall, leasing volumes in green-certified buildings grew 20% annually to reach nearly 50 million sq ft in 2024.
Green-certified buildings are not only a sustainable choice but also make a strong business case. Our analysis shows average occupancy levels in Grade A green office buildings were between 80–90%, compared to 65–85% in non-green-certified buildings. Furthermore, green-certified office spaces command significant rental premiums, led by Mumbai at 24% premium and followed by Chennai (16%) & Hyderabad (14%). This growing preference has transformed green certification from a differentiator to a baseline expectation in the Indian office market over time and is expected to become a "must-have" in the coming period.
Over the next 3 years, a significant portion of the 170-200 million sq ft of commercial developments, which are in various stages of development, will be green-certified. Meanwhile, there remains a major opportunity for retrofitting about 355–385 million sq ft of relatively older office buildings (>10 years), which can enhance the overall efficiency and sustainability quotient. This ageing office stock represents an investment opportunity to the tune of Rs 425 billion. Additionally, relatively newer buildings (≤10 years) of about 80-110 million sq ft Grade A office space hold potential for an environmental upgrade with minimal capex requirement. This presents an Rs 22-23 billion investment opportunity that can potentially result in 3-4X net cashflow benefits for developers over the remaining asset life.
Going ahead, further acceleration of green building adoption in Indian real estate will require a multi-pronged approach involving streamlining of environmental clearances, tax incentives for renewable energy usage, and stringent ESG compliance. Interestingly, the growing proportion of green-certified assets in REIT listings signals green-building affinity amongst end users, developers and investors alike. This changing narrative, backed by supportive policy and regulatory frameworks, can significantly steer capital towards a sustainable built environment in the country. The net-zero transition is realisable only through heightened adoption of green buildings across asset classes, supportive government initiatives, real estate stakeholder participation and streamlining of green certifications.
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