The landscape of commercial real estate in India is undergoing a transformative shift, fuelled by a burgeoning demand for environmentally sustainable office spaces that surpasses current supply levels.
This paradigm shift is driven by a growing cohort of environmentally conscious occupiers who prioritise the decarbonisation of their portfolios, setting the stage for intense competition and higher rental yields for property owners. According to a recent study by JLL India, there is a significant disparity between the demand for sustainable buildings and the available supply across key property markets in India, such as Mumbai and Delhi. With over 83% of occupiers aiming to achieve 100% green-certified portfolios by 2030, the study predicts a supply-demand gap of 55% over the next five years, highlighting the pressing need for more sustainable office spaces.
This surge in demand for green offices coincides with the corporate sector’s widespread commitment to achieving Net Zero Carbon (NZC) targets. Sixty-five percent of the top 100 occupiers in Mumbai and Delhi have already announced their corporate NZC commitments, further driving the need for environmentally sustainable real estate solutions. Amidst these challenges, there lies a significant opportunity for real estate developers to adopt comprehensive sustainable policies encompassing renewable energy, sustainable technology, and clean energy practices. By embracing these principles, developers can meet the evolving demands of occupiers and contribute to India’s broader sustainability goals.
Furthermore, the study reveals that nearly half of Indian occupiers intend to lease exclusively with landlords who are willing to sign green lease agreements by 2030. This trend underscores the growing importance of sustainability considerations in lease negotiations, as occupiers seek to reduce operational carbon emissions and adopt more sustainable business practices. However, concerns loom regarding the potential introduction of carbon taxes or fines based on emissions, with 70% of commercial real estate leaders identifying this as a significant area of attention for their sustainability journey. Collaboration between landlords and occupiers will be crucial in addressing these challenges and meeting the growing demand for sustainable buildings in India. India’s commercial real estate sector is witnessing a seismic shift towards sustainability, driven by the dual imperatives of environmental responsibility and corporate commitment to decarbonisation. As the demand for green office spaces continues to outpace supply, stakeholders must collaborate and innovate to create a more sustainable built environment for future generations.
