61% of Grade A office stock is green certified: report

In Mumbai, 30% of its green buildings are located in Navi Mumbai micro market, while in Pune, it is concentrated in Kharadi

Mumbai: The office real estate has registered an 83 per cent increase in green office buildings across top six cities between 2016 and 2023, and out of 691 mn sq ft of office stock created till quarter ending September 2023, 61 per cent has at least one green certification, said a report compiled by Colliers and consulting firm KPMG in India.

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The report said till quarter ending September 2023, Bengaluru had the highest 140 mn sq ft of green office stock followed by Delhi-NCR (74 mn sq ft), and Hyderabad (72 mn sq ft). Mumbai ranked fourth with 50 mn sq ft followed by Chennai (46 mn sq ft), and Pune (39 mn sq ft). The green office stock pertained to Grade A office buildings.

The ‘Sustainable real estate: an opportunity to leverage’ delves into the rise of green building certifications, the growing influence of informed investors and consumers and the impending global building expansion that underscores the undeniable importance of sustainable practices in the real estate sector.

The real estate sector accounts for an estimated 40% of the global carbon emissions.

The reports highlights that the traditional Central Business Districts (CBD), which has more buildings older than 15 years, houses just three per cent of the green office stock and most of the green buildings have come up in newer developments. For example, 30% of Mumbai’s green office stock is located in Navi Mumbai. In Bengaluru, 89% of city’s freen office stock is located in Outer Ring Road, Whitefield, and Secondary Business Districts (SBD) like Indiranagar, Koramangala, CV Raman Nagar, Jayanagar, JP Nagar, and Rajaji Nagar. In Delhi-NCR, 60% of city’s green stock is located in Gurugram. In Chennai and Pune it is located in OMR Zone 1 and Kharadi respectively.

The Leadership in Energy and Environmental Design (LEED) is the most dominant green ceritification with 89% of green buildings opting for LEED certification. Among total LEED certiied buildings in six cities, 38% possess platinum rating while 52% have gold rating, and just 1% have silver rating, the report states

It points out that about 16 to 26% of the existing ageing buildings in the top six cities have scope for upgradation and retro-fitting to improve the building performance.

“India contributes to about 7.3 per cent global emissions with real estate being one of the largest contributors, hence, the importance of sustainability in the sector cannot be overstated. The carbon emissions may reach 4.48 giga tonnes by 2030 from 2.88 giga tonnes in 2021. However, reduction in emissions by 22 per cent today can keep 2030 emissions lower at 3.48 giga tonnes,“ said Neeraj Bansal, Partner, Co-Head and COO - India Global, KPMG in India.

He said energy-efficient technologies such as automated HVAC systems, solar panels, and green roofs may result in 70 per cent less waste and 10 per cent savings in operational cost yearly. He said green buildings get 5-10 per cent higher valuation, fetch high occupancy rates.

“Green certified office buildings have almost doubled since 2016 to an impressive 421 mn sq ft, forming over 60 per cent of India’s Grade A office stock. This showcases the developers’ & occupiers’ rising commitment towards sustainability. This is likely to reflect in terms of favorable pricing and asset valuation resulting in increased brand value, client retention & rental upside.” said Badal Yagnik, Chief Executive Officer, Colliers India