India’s Leading Micro Markets Contribute 62% to Green Office Buildings: Reports

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    A recent report, released on November 7 by KPMG in India and Colliers, has highlighted the substantial contribution of the top 10 micro markets in India to the nation’s green office building supply, representing 62 percent of the total.

    The identified micro markets in the report encompass the Outer Ring Road, Whitefield, and other startup districts in Bengaluru, startup districts in Hyderabad, Chennai’s Old Mahabalipuram Road Zone 1, Kharadi in Pune, Delhi NCR-Noida Expressway, and Navi Mumbai.

    The report, titled “Sustainable Real Estate: An Opportunity to Leverage,” also underscored that the existing building stock is expected to continue emitting CO2 emissions, potentially jeopardizing the global goal set by the Paris Agreement to restrict global temperature rise to 1.5 degrees.

    In 2023, a significant shift towards sustainability was observed in the office real estate market, with an 83 percent increase in green office stock compared to 2016.

    Presently, green office stock has made substantial inroads in metropolitan and Tier-1 cities, including Bengaluru, Delhi-NCR, Hyderabad, Mumbai, Chennai, and Pune, covering a vast area of 421 million square feet.

    Moreover, the report revealed that an overwhelming 94 percent of surveyed real estate companies recognize the potential of green buildings to enhance property valuation. This growing interest aligns with the rising demand for energy-efficient buildings, considering the projected doubling of global building floor area over the next three decades.

    On the supply side, developers are actively adopting sustainable practices by adhering to established green building rating systems such as LEED (Leadership in Energy and Environmental Design), Green Rating for Integrated Habitat Assessment (GRIHA), and WELL building certification.

    The report also pointed out that there is room for improvement in the existing aging buildings, with 16-26 percent of structures in the top six cities having the potential for upgrades to enhance building performance.

    Badal Yagnik, Chief Executive Officer of Colliers India, noted that “Green-certified office buildings have almost doubled since 2016, reaching an impressive 421 million square feet, comprising over 61 percent of India’s Grade-A office stock. This underscores the increasing commitment of developers and occupiers towards sustainability.

    However, the report also sounded a note of caution, highlighting that the real estate sector remains a significant source of global carbon emissions, accounting for nearly 40 percent of total emissions. The report emphasized that, by 2040, approximately two-thirds of the existing building stock will still be responsible for carbon dioxide emissions, posing a significant challenge to the Paris Agreement’s goal of restraining global temperature rise to 1.5 degrees.

    The report recommended the adoption of energy-efficient technologies such as automated HVAC (heating, ventilation, and air conditioning) systems, solar panels, and green roofs, which could lead to a 70 percent reduction in waste and a 10 percent annual savings in operational costs. Notably, about 56 percent of stakeholders in the real estate sector prioritize sustainable buildings due to their potential for 5-10 percent higher valuation, higher occupancy rates, and better positioning in a rapidly evolving market, as stated by Neeraj Bansal, Partner, Co-head, and COO, India Global, KPMG in India.

    Also Read: India’s Data Center Stock Set to Double to 23 Million Sq. Ft in 3 Years: Colliers-CII Report

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