Bengaluru and Mumbai accounted for more than 50% share of the total 13 mn sq ft of office space leased in green-certified buildings in the top six cities in the second quarter of 2024, according to a report by Colliers.
The 13 mn sq ft of green office space take-up represents a 24% YoY increase and accounts for an 82% share in overall leasing during the quarter, the report showed.
The top six cities include Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune.
The share of Bengaluru followed by Mumbai remained significant, together accounting for over 50% of the leases in green-certified buildings in Q2 2024. Of the 13 mn sq ft of leases signed in green buildings, about 60% were in relatively newer developments which have come up in the last five years, the report showed.
This rapid growth is an indication of the rising awareness amongst corporate occupiers with respect to the role that built structures have to play in containing issues related to climate change through reducing carbon footprint, it said.
Currently, LEED, GRIHA and WELL are some of the prominent green certifications available in the Indian market, which validate buildings as โgreenโ by assessing various parameters, including energy consumption, waste generation and alignment of design with health and wellness aspects.
Technology engineering and manufacturing companies at the forefront
About 80% of leasing by technology and engineering and manufacturing firms since 2023 were in green-certified buildings. Moreover, it is noteworthy that 62% of the flex players prefer space take-up in green-certified buildings. Overall, at an India level, technology sector accounted for about 27% share in the cumulative space take-up in green-certified buildings since 2023, followed by occupiers from engineering, manufacturing and BFSI sectors with about 19% share each.
โWith 13 mn sq ft of leasing in green- certified buildings in Q2 2024, a significant 82% of occupiers were inclined towards green-certified buildings. This also reflects occupiersโ strong commitment to align their sustainability goals with the broader sustainability targets of the country,โ said Arpit Mehrotra, Managing Director, Office services, India, Colliers.
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Since 2023, about 70-80% of the space uptake by engineering and manufacturing, technology and BFSI players has been in green-certified buildings. The trend is expected to further accelerate in the next few years. Moreover, SEBIโs mandatory sustainability reporting further provides a thrust to occupiers, investors and developers to increasingly consider green portfolios while meeting their ESG targets, he said.
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With an increase in demand for green-certified buildings, there is a rise in the construction of green buildings. According to Colliers, as of June 2024, about 67% of the Grade A office buildings across the top six cities were green certified.
Bengaluru and Delhi NCR account for about half of the new green office stock
Of the 13.2 mn sq ft of new Grade A office completions in Q2 2024, almost 70% are green-certified. In the next two-three years, over 150 mn sq ft of Grade A office developments in various stages of construction across the six major cities are likely to be green certified, expanding Grade A green stock to over 600 mn sq ft.
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โWith increased inclination amongst occupiers for green-certified buildings, several Grade A developers are increasing sustainable offerings in their commercial portfolios. During the second quarter of 2024, almost 70% of the new supply was green-certified. With growing demand, developers are also retrofitting aging office stock and incorporating sustainable elements in overall building design and construction. About 300-350 mn sq ft of commercial building stock older than 10 years hold the potential to get refurbished in the next few years and add to the green-certified office stock of the country,โ said Vimal Nadar, Senior Director and Head of Research, Colliers India.
