India鈥檚 real estate sector is undergoing a decisive shift toward sustainability, with green-certified buildings rapidly becoming the norm鈥攅specially in commercial office spaces. According to the latest CREDAI-Colliers report titled 鈥淪ustainability in Real Estate: Towards a Greener Skyline,鈥� nearly 80鈥�85% of future office leasing is expected to take place in green-certified buildings, driven by energy savings, higher rental yields, and growing climate consciousness.
As of 2024, green building certifications across asset classes have soared to an impressive 13 billion sq ft, nearly doubling over five years. The momentum continues, with green-certified Grade A office stock expected to rise from 503 million sq ft to nearly 700 million sq ft in the next 2鈥�3 years.
Cities Going Green
Among top cities, Hyderabad leads in green stock penetration at 75%, closely followed by Bengaluru at 73%, which also holds the largest share of green-certified office stock at 158 million sq ft. Delhi NCR (66%), Chennai (63%), Pune (60%) and Mumbai (53%) trail behind but are showing strong adoption rates.
Leasing in green buildings now accounts for 74% of all Grade A office deals, reaching nearly 50 million sq ft in 2024. In cities like Delhi NCR and Chennai, green leasing constitutes over 80% and 74% of all new deals respectively.
The Premium Advantage
Green-certified office buildings not only boast higher occupancy levels (80鈥�90%) but also command rental premiums of up to 24%. Mumbai leads in rental premium (24%), followed by Chennai (16%) and Hyderabad (14%). This premium makes sustainability a strategic and profitable decision for developers and investors alike.
City | Rental Premium | Occupancy Level
Mumbai | 24% | 91%
Chennai | 16% | 85%
Bengaluru | 9% | 85%
Hyderabad | 14% | 80%
Delhi NCR | 13% | 81%
Pune | 4% | 88%
Green Investment Opportunities
Beyond new construction, retrofitting older office buildings presents a Rs 42,500 crore (Rs 425 billion) investment opportunity. These older assets, typically over a decade old, account for 355鈥�385 million sq ft and can be upgraded to meet modern green standards. Even newer stock (?10 years), spanning 80鈥�110 million sq ft, offers low-capex green upgrade potential worth Rs 2,200鈥�2,300 crore, yielding 3鈥�4x return on investment through enhanced operational efficiency and cashflows.
Beyond Offices: Greening the Entire Real Estate Spectrum
Sustainability is rapidly expanding beyond the office segment into residential, data centers, hospitality, healthcare, and retail. Over 2 million green-certified homes and 60+ certified townships already exist in India. Sustainable homes offer lower utility costs, better air quality, and 5鈥�10% rental premiums.
Notably, data centers, one of the most energy-intensive asset classes, are witnessing significant transformation, with operators adopting renewables and efficient cooling systems as capacities scale past 3,500 MW in the next 3鈥�5 years.
A Pivotal Shift
鈥淭he real estate sector is at the forefront of India鈥檚 low-carbon transition,鈥� said Shekhar G Patel, President, CREDAI, highlighting how green adoption is now a strategic imperative rather than an optional feature. The shift is supported by rising environmental awareness, ESG mandates, and government policies offering tax incentives and streamlined green certification processes.
鈥淭he time to act is now,鈥� said Badal Yagnik, CEO, Colliers India, adding that green leasing surged 20% in 2024, with demand only set to rise. 鈥淪ustainability has moved from a differentiator to a baseline expectation.鈥�
As India鈥檚 cities build skyward, they鈥檙e also going greener. The real estate sector鈥檚 rapid adoption of sustainable practices underscores a broader national transition鈥攚here economic growth and environmental responsibility are becoming two sides of the same coin.
India鈥檚 real estate sector is undergoing a decisive shift toward sustainability, with green-certified buildings rapidly becoming the norm鈥攅specially in commercial office spaces. According to the latest CREDAI-Colliers report titled 鈥淪ustainability in Real Estate: Towards a Greener Skyline,鈥� nearly 80鈥�85% of future office leasing is expected to take place in green-certified buildings, driven by energy savings, higher rental yields, and growing climate consciousness.
As of 2024, green building certifications across asset classes have soared to an impressive 13 billion sq ft, nearly doubling over five years. The momentum continues, with green-certified Grade A office stock expected to rise from 503 million sq ft to nearly 700 million sq ft in the next 2鈥�3 years.
Cities Going Green
Among top cities, Hyderabad leads in green stock penetration at 75%, closely followed by Bengaluru at 73%, which also holds the largest share of green-certified office stock at 158 million sq ft. Delhi NCR (66%), Chennai (63%), Pune (60%) and Mumbai (53%) trail behind but are showing strong adoption rates.
Leasing in green buildings now accounts for 74% of all Grade A office deals, reaching nearly 50 million sq ft in 2024. In cities like Delhi NCR and Chennai, green leasing constitutes over 80% and 74% of all new deals respectively.
The Premium Advantage
Green-certified office buildings not only boast higher occupancy levels (80鈥�90%) but also command rental premiums of up to 24%. Mumbai leads in rental premium (24%), followed by Chennai (16%) and Hyderabad (14%). This premium makes sustainability a strategic and profitable decision for developers and investors alike.
City | Rental Premium | Occupancy Level
Mumbai | 24% | 91%
Chennai | 16% | 85%
Bengaluru | 9% | 85%
Hyderabad | 14% | 80%
Delhi NCR | 13% | 81%
Pune | 4% | 88%
Green Investment Opportunities
Beyond new construction, retrofitting older office buildings presents a Rs 42,500 crore (Rs 425 billion) investment opportunity. These older assets, typically over a decade old, account for 355鈥�385 million sq ft and can be upgraded to meet modern green standards. Even newer stock (?10 years), spanning 80鈥�110 million sq ft, offers low-capex green upgrade potential worth Rs 2,200鈥�2,300 crore, yielding 3鈥�4x return on investment through enhanced operational efficiency and cashflows.
Beyond Offices: Greening the Entire Real Estate Spectrum
Sustainability is rapidly expanding beyond the office segment into residential, data centers, hospitality, healthcare, and retail. Over 2 million green-certified homes and 60+ certified townships already exist in India. Sustainable homes offer lower utility costs, better air quality, and 5鈥�10% rental premiums.
Notably, data centers, one of the most energy-intensive asset classes, are witnessing significant transformation, with operators adopting renewables and efficient cooling systems as capacities scale past 3,500 MW in the next 3鈥�5 years.
A Pivotal Shift
鈥淭he real estate sector is at the forefront of India鈥檚 low-carbon transition,鈥� said Shekhar G Patel, President, CREDAI, highlighting how green adoption is now a strategic imperative rather than an optional feature. The shift is supported by rising environmental awareness, ESG mandates, and government policies offering tax incentives and streamlined green certification processes.
鈥淭he time to act is now,鈥� said Badal Yagnik, CEO, Colliers India, adding that green leasing surged 20% in 2024, with demand only set to rise. 鈥淪ustainability has moved from a differentiator to a baseline expectation.鈥�
As India鈥檚 cities build skyward, they鈥檙e also going greener. The real estate sector鈥檚 rapid adoption of sustainable practices underscores a broader national transition鈥攚here economic growth and environmental responsibility are becoming two sides of the same coin.
