65% Grade A office space in India's top 7 cities green-certified: Vestian

Southern cities such as Bengaluru, Chennai, Hyderabad comprise 58% of India's total green building stock, says the consultancy

As Indian real estate evolves, ESG (environmental, social, and governance) factors are becoming a focus area for developers and the government, which aims for net-zero emissions by 2070. According to Bengaluru-based real estate consultancy Vestian Research, over 65 per cent of Grade A office space in India’s top seven cities is green-certified. Of the 1,362 Grade A buildings across these cities, 805 are green certified, it adds.

The consultancy says that by Q2 2024, the Leadership in Energy and Environmental Design (LEED) certification has achieved a 74 per cent market share. Among LEED, Gold is the most prevalent level, with 49 per cent of buildings holding Gold LEED certification and 51 per cent accredited as Gold by the Indian Green Building Council (IGBC). Gold certification denotes that a building has excelled in its sustainable design and operation, securing over 60 per cent of the LEED points. 

 

According to the consultancy, southern cities such as Bengaluru, Chennai and Hyderabad comprise 58 per cent of India's total green building stock. Among the top seven cities, Bengaluru leads with 172 million square feet of green-certified space. Chennai has the highest percentage, with 83 per cent of its Grade A stock being green-certified.

Despite having the lowest total of Grade A office buildings nationwide, Kolkata boasts 62 per cent green certification. Conversely, Pune, despite being a prominent hub for multinational companies, has the lowest percentage of green-certified office buildings at 56 per cent.

Furthermore, Vestian reports that Grade A office buildings with a built-up area of less than 500,000 square feet make up 47 per cent of all green-certified buildings. In contrast, those exceeding 1 million square feet account for only 19 per cent. Despite this, 90 per cent of projects in the larger category still meet green building standards.

Green-certified buildings typically command a 12 to 14 per cent rental premium over non-green buildings, reflecting the market's reward for sustainable development investments. 

Bengaluru leads with a significant premium of 23-25 per cent, while Chennai and Hyderabad follow with premiums of 12-14 per cent and 13-15 per cent, respectively. This indicates a strong emphasis on sustainability in these tech hubs, where companies are willing to pay more to support environmental responsibility and enhance employee well-being. In Mumbai and Pune, green-certified buildings command an 8-12 per cent premium compared to non-certified counterparts.