Commercial real estate shifts to sustainability amid rising demand
green buildings is transforming India's commercial real estate sector, with a substantial portion of Grade A office demand driven by global capability centres (GCCs) and IT/IT-enabled services (ITeS) firms.
Trump-Modi Meet
The mega MIGA, MAGA plans of India's Modi and US' Trump
Trump says India has more tariffs than others
Trump's 'golden rule' for imposing reciprocal tariffs
These companies, which account for 50-60% of net office leasing, are prioritizing sustainable workspaces to align with growing environmental compliance requirements and corporate sustainability goals. A similar trend is evident on the supply side too, showed a CRISIL Ratings study.
A cost-benefit analysis further highlights the appeal of green buildings, as their slightly higher initial costs are outweighed by substantial long-term benefits for both developers and tenants.
“Though green buildings typically incur a 3-5% higher upfront construction cost compared with traditional buildings, tenants are willing to pay a slight premium as rentals in India are still globally competitive. Green buildings provide enhanced employee experience and long-term cost savings to tenants, with lower energy consumption and water usage, due to the integration of energy-efficient technologies and sustainable materials,” said Gautam Shahi, Director, Crisil Ratings.
According to him, this translates to a significant reduction in utility expenses, resulting in tenants saving up to 30-35%4 in energy costs compared with a traditional building.
Artificial
