India’s real estate sector is undergoing a major transformation, with sustainability emerging as a key cornerstone and growth driver across asset classes. Real estate and construction accounts for nearly 40% of the global carbon emissions and thus the built environment in India is increasingly stepping up decarbonization efforts to achieve sustainability goals. Rising environmental awareness, stricter regulations, and sustainability goals are accelerating the pace of green building adoption in the country. The role of the real estate sector is particularly vital in embracing sustainability across the value chain and paves the way for a carbon-neutral future. Overall, 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.
The CREDAI-Colliers’ report “Sustainability in Real Estate: Towards a Greener Skyline” provides an overview of India’s green real estate landscape at the macro-level and highlights increased sustainability adoption across asset classes. In the office segment, two-thirds of Grade A stock in the top six cities was green certified, at 503 million sq ft by the end of 2024. Additionally, with the majority of the upcoming commercial developments expected to become sustainable from the outset, the green certified Grade A stock in the country can reach close to 700 million sq ft over the course of next 2-3 years. 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 real estate sector continues to play a defining role in driving India’s transition towards a sustainable, low-carbon future. With green-certified buildings now accounting for a significant share of new developments, it’s evident that sustainability is becoming a core pillar of real estate strategy across asset classes. This 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.
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 ~40% rise in green office stock since the beginning of the ongoing decade reflects developers’ commitment to evolving market scenarios and the resultant occupier preferences. Notably, Bengaluru accounted for 31% of India’s green-certified office stock, followed by Delhi NCR (19%) and Hyderabad (17%). In terms of green penetration which is indicated by the share of green-certified buildings in the total Grade A office stock in each city, Hyderabad led other major markets with a penetration rate of 75%, closely followed by Bengaluru with 73% in 2024.
On the supply front, over the last 5 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 ~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.
Office market: City-wise Grade A stock and leasing in green-certified buildings (2024)
Going ahead, further acceleration of green building adoption in Indian real estate will require a multi-pronged approach involving streamlining of environmental clearances, tax incentives for renewable energy usage, and stringent ESG compliance. Interestingly, the growing proportion of green-certified assets in REIT listings signal green building affinity amongst end users, developers and investors alike. This changing narrative backed by supportive policy and regulatory frameworks can significantly steer capital towards a sustainable built environment in the country. In fact, the net-zero transition is realizable only through heightened adoption of green buildings across asset classes, supportive government initiatives, real estate stakeholder participation and streamlining of green certifications.
