ARE GREEN BUILDINGS NOW A TENANT EXPECTATION?

India’s commercial real estate market is undergoing a profound shift. What was once considered a luxury or branding exercise—occupying a green-certified building—has rapidly become a baseline tenant expectation.

How Did Green Offices Become Mainstream?

The evolution of India’s green building movement has been nothing short of dramatic. As Dr. Mala Singh, Chairperson, IGBC, Mumbai Chapter said, the country had just one green certified building in 2001. Today, the Indian Green Building Council (IGBC) has certified 14 billion square feet across commercial, residential, healthcare, and infrastructure sectors.

The IGBC’s 32 rating systems, Singh explained, are more than just checklists, they are “transformative tools” guiding stakeholders through the shift to sustainable practices. What was once a differentiator is now a non-negotiable. Abbishek Sharma, Executive Director - Commercial Leasing & Advisory, Anarock Property Consultants Pvt. Ltd recalled his early career in real estate: “When I started, sustainability wasn’t even discussed. It became a differentiator, but now it’s a must-have. Buildings without certification aren’t appreciated by occupiers.”

The Data Speaks

According to an Anarock report, 65% of tenants now demand green certifications, with the figure even higher among global firms. A remarkable 68% of global brands have pledged to reinforce green norms, and 40% already operate out of green certified offices. The economics are equally telling. Tenants are willing to pay a 10% “green premium” on rentals, while non-green buildings suffer a “brown discount”—higher vacancies and rental drops, starting at 5% annually. From a developer’s lens, Tripti Agarwal, Sr. Vice President – Commercial Transactions and Growth Strategy, Century Real Estate confirmed the market shift, “Green buildings have moved from nice-to-have to must-have; they’re deal-breakers.” In H1 2025 alone, over 70% of office leasing occurred in green certified assets, with the country’s green commercial stock surpassing 500 million square feet. As Tripti Agarwal noted, “Over 75% of leasing requirements we see focus on green features, from renewable energy integration to wellness and air quality metrics.”

Push Factors: Occupiers, Regulators & Investors

Why the urgency now? It’s the convergence of multiple push factors. Regulators, investors, and occupiers are finally aligned. Tripti Agarwal described it as an ecosystem play: “Investors prioritize assets that meet sustainability mandates from their limited partners, while occupiers follow global commitments. Regulators add the third leg of the stool.” From the occupier’s side, Navinder Narang, Head - Infrastructure Facilities & ESG, ICICI Home Finance Company Ltd likened the journey to the adoption of color televisions: “Initially, it’s a push from the system—early adoption is top-down. But now we are entering the pull phase, where tenants demand transparency in savings and green ecosystems.”

Narang Narang offered a telling example. ICICI Home Finance bypassed a nearby conventional office for a green certified building located 2–3 km farther. “Occupiers are ready to pass on non-green buildings,” he said. “It’s about brand enhancement and putting money where it matters.” Senthilraj Balachandran, Sr. VP – Head of MEP & Sustainability, K Raheja Corp added that Indian corporates are no less demanding than their global peers. “Both demand it equally. MNCs integrate it by default, but Indian corporates are mature and make it a tick-mark in selection. In fact, Indian demand is stronger in volume.” Still, execution isn’t easy particularly in multi-tenant assets. Dr. Mala Singh advocated for regulatory incentives and HR-led behavior change programs like “green hero” initiatives to embed sustainability in workplace culture.

Innovation At The Core

Sustainability is not only about demand but also about innovation in supply. Nitin Gupta, Head-Technical (RMX) at Nuvoco Vistas Corp underscored the revolution in construction materials. “The old focus was strength; now it’s performance and sustainability,” he said Concrete, which constitutes 70–80% of building materials, is being reimagined. Innovations such as LC3 cement (limestone calcined clay cement) reduce clinker content and slash CO? emissions by over 70% compared to ordinary Portland cement. New IS codes now mandate chloride resistance (RCP values), setting a higher bar for durability and sustainability Other emerging solutions include cross-laminated timber for carbon-negative structures and recycled aggregates. But adoption remains slow. From the developer’s perspective, Tripti Agarwal highlighted the role of smart operations—sensors to monitor air quality, daylighting strategies, and biophilic designs that improve both well-being and productivity.

The Road Ahead

The conclusion is clear: in India’s commercial real estate market, green buildings are no longer a differentiator—they have become a tenant expectation. Developers who embrace this reality stand to capture both economic and reputational gains, while those who resist risk being left behind in a rapidly greening marketplace.