India’s commercial real estate landscape, over 65% of Grade A office space in the country’s top seven cities now boasts green certification, according to a recent report by Vestian Research. This milestone underscores India’s growing commitment to sustainable development practices within the built environment.
The report highlights that out of 1,362 Grade A buildings surveyed across key metropolitan areas, a substantial 805 buildings, or 59%, have achieved green certifications. This surge in eco-friendly certifications reflects the evolving preferences of global occupiers and the strategic focus of developers on international sustainability standards. Leading the charge in green building certifications is the Leadership in Energy and Environmental Design (LEED) certification, which commands a dominant 74% share in the market as of Q2 2024. Gold certification under both LEED and the Indian Green Building Council (IGBC) stands out prominently, with 49% of buildings certified under LEED Gold and an additional 51% under IGBC Gold.
Southern cities such as Bengaluru, Chennai, and Hyderabad collectively account for 58% of India’s green-certified office stock. Bengaluru leads with an impressive 172 million square feet of green-certified space, while Chennai boasts the highest proportion of green-certified stock at 83% of its Grade A office inventory. Green-certified buildings command a rental premium of 12% to 14% on average compared to their non-certified counterparts. Bengaluru leads with a premium of 23-25%, followed by Chennai and Hyderabad with 12-14% and 13-15% premiums respectively. This premium reflects the value occupiers place on sustainable workplaces, contributing to enhanced employee well-being and operational efficiency.
Despite Kolkata having the lowest overall Grade A office stock nationally, 62% of its area is green-certified, showcasing a robust commitment to sustainability despite smaller absolute numbers. Conversely, Pune reports the lowest percentage of green-certified buildings at 56%, despite hosting numerous multinational corporations. The report also sheds light on the size distribution of green-certified buildings, revealing that smaller office spaces below 5 lakh square feet constitute 47% of all green-certified projects. Larger buildings exceeding 10 lakh square feet, while fewer in number at 19%, maintain a high 90% green certification rate, indicating a strong emphasis on sustainability among major developers.
