Why Are Green Buildings Currently a Focus in India?

When it comes to Indian real estate, especially commercial real estate in India - Sustainability is now a vital metric in the vast majority of office property transactions, whether for outright purchase or leasing.

According to industry professionals, even financiers of housing and residential projects in India are also displaying an investment preference for such Green projects.

Significant emphasis on establishing long-term sustainability goals across industries is resulting in an increased preference for green buildings among global institutional investors and developers, with corporate office occupants driving the shift towards climate-conscious properties with lower carbon emissions.

Investors and occupants are interested in such buildings in light of the government's new NSG reporting mandates.

The transition is occurring not only as a result of global movement, but also as a result of the Indian government's new environmental, social, and governance (ESG) reporting requirements for the country's 1,000 largest listed companies by market capitalization. The Securities and Exchange Board of India (Sebi) requires disclosure via the Business Responsibility and Sustainability Report (BRR), which became mandatory in 2022-23.

Historically, the lease agreement outlined only the commercial provisions. But lease agreements have evolved over time. It is now also a platform for landlords and tenants to work together to attain ESG objectives.

Green Grade A office stock penetration in India is currently 374 million square feet, or 48.5% of the total 771.5 million square foot supply. This includes 84 million square feet in Bengaluru, 78.1 million square feet in Delhi-NCR, and 68.1 million square feet in Mumbai. 

JLL India data reveals that 60 percent of office supplies in Kolkata, 58 percent in Chennai, and 53.4% in Delhi-NCR are green-certified.