India is taking strides towards developing sustainable real estate. As of 2023, over 61% of India’s Grade A office stock is green, resulting in a 35% reduction in emissions and a 20% reduction in maintenance costs.
A KPMG and Colliers report on India’s sustainable real estate has highlighted the rise of green building certifications, informed investors, and global expansion.
The report titled: Sustainable Real Estate: An Opportunity to Leverage’ emphasizes the importance of sustainable practices.
It noted rapid growth in green real estate, particularly in Grade A office categories. The trend is expected to rapidly increase as customers are willing to pay a premium for green buildings. Real estate firms are increasingly incorporating sustainable solutions throughout the project life cycle. Green buildings are gaining momentum from both developer and occupier perspectives.
The real estate industry accounts for nearly 40% of global carbon emissions. By 2040, two-thirds of existing building stock will continue contributing to CO2 emissions. This can challenge the Paris Agreement’s 1.5°C temperature limit target.
Key highlights:
In 2023, the office real estate market witnessed a significant shift towards sustainability, with an 83% increase in green office stock compared to 2016.
In 2023, 61% of the office market stock in India was green, indicating a growing trend in green investing.
94% of real estate companies recognize green buildings’ potential to boost valuation, aligning with the growing demand for energy-efficient buildings. This is due to the projected global building floor area doubling in three decades.
Sustainable commercial real estate:
Developers are promoting sustainable commercial real estate through green building rating systems like LEED, GRIHA, and WELL certification.
India’s sustainability objectives, including achieving net zero emissions by 2070 and generating 50% of its energy from renewable sources by 2030, symbolize its commitment to a greener future.
Green penetration of Grade-A office stock in metropolitan and Tier-1 Indian cities, including Bengaluru, Delhi-NCR, Hyderabad, Mumbai, Chennai, and Pune, is significant.
16-26% of aging buildings in the top six cities require upgrading to enhance performance, the report said.