India’s real estate industry is witnessing a transformative shift, with sustainability no longer an option but a strategic imperative. According to a joint report by Colliers India and CREDAI titled “Sustainability in Real Estate: Towards a Greener Skyline”, the country is embracing green buildings across asset classes at an unprecedented pace.

“This is a pivotal moment for India’s real estate. With over 13 billion sq ft of certified green buildings, the sector is clearly moving towards a low-carbon future.”
— Shekhar G Patel, President, CREDAI

Key Highlights from the Report

• 66% of Grade A office stock in India is green-certified (503 million sq ft as of 2024).
• Green-certified buildings command up to 25% higher rents and 80–90% occupancy rates.
• Leasing in green-certified buildings surged by 20% annually, accounting for 74% of all leasing in 2024.
• Green stock is projected to cross 700 million sq ft in the next 2–3 years.
• Investment opportunity of over INR 425 billion identified for retrofitting old office buildings.

City-Wise Performance: Green Leasing & Penetration (2024)

Why the Rush to Go Green?

Sustainability is increasingly driving occupier preference, developer strategy, and investor sentiment:

• Higher rental yields: Mumbai leads with 24% rental premium in green-certified offices.
• Energy efficiency & cost savings: Lower operational costs and improved air quality.
• Compliance with ESG mandates: A growing expectation, especially from MNC occupiers and REIT investors.

“Green buildings have moved from being a differentiator to a baseline expectation.”
— Badal Yagnik, CEO, Colliers India

Retrofitting: A Billion-Dollar Opportunity

Colliers estimates that:

• Over 355–385 mn sq ft of older office stock (>10 years) can be retrofitted for sustainability.
• This represents an investment potential of INR 425 billion.
• An additional 80–110 mn sq ft of relatively newer buildings also holds upgrade potential with minimal capex.

Sustainability Spreads Across Asset Classes

While the focus is currently on offices, green adoption is rapidly spreading to:

• Data Centers: Among the most energy-intensive, now pivoting to renewable energy.
• Retail & Hospitality: Embracing sustainable materials and energy systems.
• Healthcare: Integrating green architecture for healthier indoor environments.

Looking Ahead: Policy, Regulation & Momentum

For India to scale green real estate:

• Faster environmental clearances are needed.
• Tax incentives for renewable energy should be expanded.
• Stricter ESG compliance and awareness campaigns must be introduced.

Did You Know?
India’s green-certified building footprint has nearly doubled in just 5 years, reaching 13 billion sq ft in 2024.

Conclusion

India is at a critical juncture in its urban transformation journey. As developers, occupiers, and investors increasingly align with sustainable goals, green-certified buildings are no longer an exception—they are the future. The coming years will likely define how real estate drives not just economic value, but environmental responsibility.

Also Read: Green Building Certifications on the Rise: India Embraces Sustainable Construction

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However, widespread adoption is still a long way, and this can be attributed to the lack of industry-wide guidance, transparency, legal complexities, and split incentives. While the beginnings of change are already evident, India still has a long road to travel on the green lease continuum.

Global occupiers lead the way in sustainable practices

Global occupiers and institutional landlords are at the forefront of sustainable practices, with GCCs accounting for over three fourth of the overall green leasing activity in India. Moreover, it comes as no surprise that the two largest GCC markets of Hyderabad and Bengaluru lead the adoption of green leasing practices, accounting for 64% of the overall green leasing in India.

Waste management, energy efficiency and data sharing are key aspects

Green leasing clauses mainly focus on waste management, energy efficiency and data sharing aspects, with waste management and recycling obligations finding their way into most green lease agreements and some standard lease agreements as well. Energy efficiency is an important instrument towards reducing a building’s carbon footprint and hence, multiple clauses are centred around it.

“Sustainability has now firmly been incorporated into the board room agenda. Various strategies are being devised to reduce carbon emissions from the built environment, and green building certifications and green leases play a crucial role in this endeavor. The Indian market is making significant strides towards sustainability and the increase in green-certified office penetration from 39% in 2020 to 53% in 2023, is a clear indication of this progress. However, environmental performance results will still be lackluster if the building is not operated efficiently. Given the important role of occupiers in ensuring operational efficiency, moving from ‘traditional leases’ to ‘collaboration based green leases’ that enable data sharing and active collaboration between building owners and occupiers, is the need of the hour”, said Dr. Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.

“The office segment saw the last two decades focus on Green Buildings. We believe this contributed to India reducing its GDP emission intensity by 33 percent between 2005 and 2019, achieving the target 11 years in advance. Next target is to reduce GDP emissions by 45% by 2030 and achieve net zero emissions by 2070. The realty sector will play a key role in this mission and The next two decades are going to see the focus move to Green Leasing. Green leases, accounting for around 15% of overall leasing today, are bound to reach around 15-20% penetration within the next 1-2 years. As both parties, landlords, and occupiers realize the benefits of green leasing, we believe a significant rental arbitrage to the tune of 10-15% will soon be visible between green and non-green leases”, said Abhishek Kiran Gupta, CEO & Co-founder, CRE Matrix.

Outlook

Looking ahead, green building certification will become a de-facto requirement for prominent occupiers in their selection of office spaces. As occupiers integrate environmental, social, and governance (ESG) factors and net zero carbon (NZC) targets into their decision-making, the green lease contract will play a crucial role. It will go beyond basic energy conservation ambitions to include clauses related to social value and good governance. Occupiers and landlords will engage in active mission-aligned collaboration throughout the life of the lease with measurable goals and corresponding KPIs to ensure desired outcomes. Importantly, a building’s value will increasingly rely on its environmental performance, and collaborative green leases will be a critical part of asset management strategies.

Also Read: Godrej Properties sells over 600 homes worth INR 2,600 crore at the launch of its project Godrej Aristocrat in Gurugram

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