A recent Vestian Research report highlights a notable rise in green-certified office spaces across India's top seven cities. Over 65% of Grade A office buildings in Bengaluru, Delhi, Chennai, Kolkata, Hyderabad, Pune, and Mumbai now boast certifications for environmental and energy-efficient standards. This equates to more than 805 buildings out of 1,362 Grade A properties certified. LEED certifications, particularly at the Gold level, dominate the landscape, focusing on optimising energy, water usage, and promoting healthy work environments. The trend underscores a growing corporate preference for sustainability, with cities like Bengaluru and Chennai leading the charge in green building adoption and premium pricing benefits.
A recent report by Vestian Research shows a significant increase in green-certified office spaces across India's top seven cities: Bengaluru, Delhi, Chennai, Kolkata, Hyderabad, Pune, and Mumbai. This trend reflects a growing commitment to sustainable construction practices in the commercial real estate sector.
The report reveals that over 65% of Grade A office space - the highest quality office buildings - across these major cities is now green-certified. This translates to over 805 buildings out of 1,362 total Grade A buildings that boast certifications meeting environmental and energy-efficient standards.
The most popular green certification system in India is LEED (Leadership in Energy and Environmental Design). As of the second quarter of 2024, a remarkable 74% of green-certified buildings hold a LEED certification, with "Gold" being the most prevalent level. This indicates a focus on optimising energy and water usage (up to 49% and 51% certified Gold under LEED and IGBC respectively), reducing waste, and promoting a healthy work environment.
Southern cities are at the forefront of this green movement. Bengaluru holds the top spot with the highest total green office space (172 million square feet), followed by Chennai and Hyderabad. Interestingly, Chennai boasts the highest percentage (83%) of green buildings compared to its total Grade A office space.
Green buildings not only benefit the environment, but they also offer financial advantages to developers. Studies show that tenants are willing to pay a premium of 12% to 14% on average for green-certified office spaces compared to non-green buildings. This suggests a growing awareness of the importance of sustainability among businesses. Cities like Bengaluru, Chennai, and Hyderabad see even higher premiums (23-25%, 12-14%, and 13-15% respectively) reflecting a strong focus on environmental responsibility in these tech hubs.
While the overall trend is positive, smaller office buildings (less than 1 lakh sq ft) have a lower green certification rate. This suggests a need for greater awareness and education among small and medium-scale developers on the long-term benefits of sustainable practices. Overall, the rise of green-certified office spaces in India, with over 65% of Grade A space certified and LEED being the dominant system, signifies a promising shift towards a more environmentally conscious future for the commercial real estate sector.
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