The Future is Green - Environmentally Friendly Office Buildings in India Increase to Almost 350 Million Sq Ft

A report titled ‘Indian Real Estate: Taking Giant Strides – 2023 Mid-Year Outlook,’ a collaborative effort by CBRE-CII, unveiled at the CII Realty 2023 conference, sheds light on the significant strides made by the Indian real estate sector.

It outlines the growth, key trends, and future projections for the sector in India for the remainder of 2023.

Details:

The report reveals a substantial 36% increase in green-compliant office buildings stock since 2019, reaching 342 million square feet across the top six cities in India. This surge is attributed to the heightened focus on sustainability by developers and occupiers. Bangalore, Delhi-NCR, and Mumbai are leading this green revolution, contributing around 68% to the total green-certified office stock in India as of June 2023.

The report also emphasizes the growing inclination towards modern, premium, and sustainable spaces due to enhanced global and domestic Environmental, Social, and Governance (ESG) regulations.

Key Takeaways:

Sustainability and ESG Compliance:

The emphasis on green-compliant office spaces is indicative of the real estate sector's alignment with global sustainability goals and ESG compliance. This alignment is driven by both global and domestic mandates such as the Corporate Sustainability Reporting Directive (CSRD), Enhancement and Standardization of Climate-related Disclosures, and India’s Business Responsibility and Sustainability Reports (BRSR).

City-wise Contribution:

Bangalore is at the forefront, accounting for approximately 30% of the total green-compliant office stock in India, followed by Delhi-NCR and Mumbai. This suggests a concentrated development of green buildings in these metropolitan areas, reflecting their commitment to sustainable development.

Economic Resilience and Growth:

Despite global economic slowdowns, the Indian real estate sector has showcased remarkable resilience, primarily fueled by robust domestic demand. The halt in the rate hike cycle in India is in sync with major global economies, with the RBI maintaining the status quo in recent reviews.

Future Prospects:

The sector is anticipated to witness accelerated demand in green-compliant, tech-enabled modern spaces in the upcoming quarter. Alternative segments like GCC’s, data centers, and flexible workspaces are also expected to significantly contribute to the growth of real estate.

Integration with Green Building Information in India:

Green buildings in India are designed to be resource-efficient and environmentally conscious throughout their lifecycle. The Indian Green Building Council (IGBC), formed by the Confederation of Indian Industry (CII) in 2001, is the premier body for green building certification in India. It has registered 8,669 projects amounting to a total footprint of 9.75 billion square feet.

These IGBC-rated projects have demonstrated substantial savings in energy and water consumption and reduced CO2 emissions.

The emphasis on green buildings is not just a modern concept; traditional buildings in India also incorporated energy-efficient practices, utilizing architecture that was dependent on the local climate and environment.

The government initiatives and partnerships, like the one between IFC and CREDAI, aim to promote green buildings in the country, emphasizing the importance of sustainable development in the real estate sector.

Conclusion:

The substantial growth in green-compliant office buildings in India is a testament to the country’s commitment to sustainability and environmental conservation. The focus on ESG compliance and sustainable building features is reshaping the real estate sector, with cities like Bangalore, Delhi-NCR, and Mumbai leading the way.

The integration of traditional and modern sustainable practices is paving the way for a greener and more sustainable future in the Indian real estate sector.