Green office space inventory to touch 700 mn sq ft by 2027: Credai-Colliers

Almost two-thirds of the total Grade A office space across India’s top six cities—amounting to 503 million sq ft—was green certified by the end of 2024. With most upcoming commercial projects being designed with sustainability at their core, the green-certified premium office stock is projected to reach nearly 700 million sq ft over the next two to three years, a Credai-Colliers report said on April 18.

Among the cities, Bengaluru led in terms of total green-certified office space, contributing 31% of the national stock, followed by Delhi NCR at 19% and Hyderabad at 17%. When it comes to green penetration—the share of green-certified buildings within the overall Grade A office stock—Hyderabad topped the list with a penetration rate of 75%, closely followed by Bengaluru at 73% in 2024, said the CREDAI-Colliers’ report ‘Sustainability in Real Estate: Towards a Greener Skyline’.

Green building footprint across asset classes has nearly doubled over the last five years to reach 13 billion sq ft in 2024. As of 2024, more than 2 million residential dwelling units, 6,500 commercial projects and 750 industrial projects were green-certified and sustainability adoption is likely to pick pace across real estate segments in the coming years.

Over the next three years, a significant portion of the 170-200 mn sq ft of commercial developments which are in various stages of development will be green-certified. These also command a rental premium of up to 25%, it said.

There’s also a major opportunity for retrofitting about 355–385 million sq ft of relatively older office buildings (>10 years), which can enhance the overall efficiency and sustainability quotient, it noted.

The aging office stock represents an investment opportunity to the tune of ₹425 billion. Additionally, relatively newer buildings (≤10 years) of about 80-110 million sq ft Grade A office space hold potential for environmental upgrade with minimal capex requirement. This presents an ₹22-23 billion investment opportunity that can potentially result in 3-4X net cashflow benefit for developers over the remaining asset life, the report observed.

66% of Grade A office stock in India is green-certified

As of 2024, green-certified office stock in India stood at about 503 million sq ft, representing 66% of the total Grade A inventory across the top six cities. The almost 40% rise in green office stock since the beginning of the ongoing decade reflects developers’ commitment to evolving market scenario and the resultant occupier preferences.

On the supply front, over the last five years (2020-2024) about 80% of the new Grade A office supply has been green-certified. The surge in green building supply has been driven by a clear shift in occupier preferences, with almost 75% of leases in 2024 being transacted in green-certified buildings. Overall, leasing volumes in green-certified buildings grew 20% annually to reach close to 50 million sq ft in 2024, it noted.

In the residential segment, heightened green building adoption was indicated by over 2 million green-certified homes and 60+ certified townships (2024). Sustainable houses typically offer tangible benefits in the form of lower utility bills, better air quality, and rental premiums of 5–10%.

Green adoption is also gaining ground in industrial, healthcare, retail, hospitality and data center segments. Developers and occupiers are increasingly opting for sustainable, energy-efficient buildings to align with climate targets and net-zero commitments, the report said.

“The report highlights how developers, occupiers, and investors are increasingly aligning with India’s climate goals through responsible construction and the impact of government incentives, regulations, and frameworks designed to encourage energy-efficient construction, renewable energy adoption, and sustainable building practices. We believe this is a pivotal moment to scale green adoption not just in commercial spaces but across residential, industrial, and emerging sectors like data centers. Our collective efforts today will shape the urban future of tomorrow, where environmental responsibility and economic growth reinforce each other,” said Shekhar G Patel, president, CREDAI.

“Leasing in green-certified buildings surged annually by 20% in 2024. Looking ahead, the proportion of leasing in green-certified buildings is expected to rise from ~75% currently to about 80-85% in the next few years. This underscores the continued shift towards sustainable real estate development in the office market of the country,” said Badal Yagnik, Chief Executive Officer, Colliers India.

Green-certified buildings achieve higher occupancy rates and rental premiums

As per the Credai-Colliers report, the average occupancy levels in Grade A green office buildings were between 80–90%, compared to 65–85% in non-green-certified buildings. Furthermore, green-certified office spaces command significant rental premiums, led by Mumbai at 24% premium and followed by Chennai (16%) and Hyderabad (14%).