A new report from Credai-Colliers has revealed that India’s green office space inventory is on track to reach nearly 700 million square feet by 2027, as reported by Hindustan Times.
The report, titled Sustainability in Real Estate: Towards a Greener Skyline, emphasizes that two-thirds of Grade A office space in India’s top six cities is now green-certified, with a significant rise expected in the next few years.
By the end of 2024, green-certified Grade A office space across India’s top six cities amounted to approximately 503 million square feet, representing nearly 66% of the total Grade A office inventory. This surge is attributed to increasing developer commitment to sustainability, with most upcoming commercial developments designed with green certification as a core feature.
Among the cities, Bengaluru leads in terms of total green-certified office space, contributing 31% of the national stock. Delhi NCR follows at 19%, while Hyderabad accounts for 17%. In terms of green office space penetration—defined as the share of green-certified buildings within the overall Grade A stock—Hyderabad ranks first, with a penetration rate of 75%. Bengaluru is closely behind at 73% as of 2024.
The green office market is expected to continue expanding. In the next two to three years, as many as 170–200 million square feet of commercial developments currently in various stages of construction are projected to be green-certified. These green-certified buildings offer a significant rental premium of up to 25%, making them an increasingly attractive investment option.
The green building footprint in India has grown significantly, nearly doubling over the past five years. By 2024, it reached 13 billion square feet across all real estate asset classes. This includes over 2 million green-certified residential units, 6,500 green-certified commercial projects, and 750 green-certified industrial projects.
As of 2024, approximately 80% of new Grade A office space delivered between 2020 and 2024 has been green-certified, reflecting the growing demand for sustainable buildings. Leasing volumes in green-certified buildings grew 20% annually in 2024, reaching nearly 50 million square feet, further demonstrating the shift towards sustainable real estate.
An additional opportunity lies in retrofitting older office buildings, with around 355–385 million square feet of office space, aged over 10 years, available for upgrades. Retrofitting these buildings to meet green standards could represent an investment opportunity of ₹425 billion. Additionally, around 80–110 million square feet of newer Grade A office space (less than 10 years old) also holds potential for environmental upgrades with minimal capital expenditure. This retrofitting process could bring about an estimated ₹22–23 billion investment opportunity, offering a 3-4X net cash flow benefit for developers.
Leasing activity in green-certified office buildings is growing rapidly. By 2024, nearly 75% of leases were transacted in green-certified buildings, marking a clear shift in occupier preferences. The leasing volumes in green-certified spaces grew by 20%, and occupancy levels in these buildings averaged between 80–90%, compared to 65–85% in non-green-certified buildings.
Green-certified buildings also command rental premiums, with the highest premium seen in Mumbai at 24%. Other cities with significant premiums include Chennai (16%) and Hyderabad (14%). Green buildings provide occupiers with numerous benefits, including lower utility costs, improved air quality, and higher occupancy rates, making them a more attractive option for businesses.
Sustainability adoption is not limited to commercial office spaces. Green building certifications are also gaining ground in industrial, healthcare, retail, hospitality, and data center sectors. These sectors are increasingly turning to energy-efficient buildings to align with national climate goals and global net-zero commitments.
Shekhar G. Patel, president of CREDAI, highlighted that the report underscores how developers, occupiers, and investors are aligning with India’s climate goals through responsible construction practices. He stressed the importance of government incentives and frameworks that encourage energy-efficient construction, renewable energy adoption, and sustainable practices in building design.
Badal Yagnik, CEO of Colliers India, noted that leasing in green-certified buildings has surged by 20% annually in 2024. Looking ahead, he expects the proportion of leasing in green-certified buildings to rise from approximately 75% currently to around 80-85% in the coming years. This reflects the ongoing shift toward sustainable development in the office real estate sector.
The green office space market in India is poised for continued growth, with sustainability playing an increasingly crucial role in the commercial real estate landscape. As green-certified buildings become more prevalent, they are driving higher occupancy rates, rental premiums, and investor interest. The momentum for green building adoption across residential, industrial, and commercial sectors is expected to persist, contributing to a more sustainable urban future for India.