Green office inventory to touch 700 msf in next two to three years

Green office inventory is expected to reach about 700 million square feet (msf) in the next two to three years, with up to 85 per cent of office leasing expected to come in green-certified office buildings in the near term, according to a joint report by Credai and Colliers.

 

Currently, two-thirds of Grade A office stock is already green-certified across the top six cities, with these buildings having higher occupancy levels at 80 to 90 per cent and commanding rental premiums of up to 25 per cent.

 

Of these, Bengaluru tops the list, accounting for 31 per cent of the country’s green building stock. It is followed by Delhi NCR at 19 per cent and Hyderabad at 17 per cent.

 

“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 per cent, closely followed by Bengaluru with 73 per cent in 2024,” the report stated.

 

The report also added that there is an investment potential of over Rs 42,500 crore to emerge from retrofitting office buildings older than 10 years, accounting for about 355 to 385 msf of office space.

 

“Retrofitting existing buildings with sustainable elements can improve energy efficiency and prolong the lifespan of structures, making them more attractive for occupiers,” Badal Yagnik, chief executive officer, Colliers India said.

 

This comes even as green building adoption is accelerating across real estate segments, led by energy savings, rental premiums, and emission reductions.

 

Vimal Nadar, senior director and head of research at Colliers India, said that green building adoption is no longer confined to core real estate segments alone, with the trend rapidly expanding into multiple asset classes like data centres, retail, hospitality, and healthcare.

 

“With data centre capacity in the country projected to exceed 3,500 megawatts (MW) over the next three to five years, leading operators are increasingly embracing sustainability led by renewable energy usage and enhancements in power and water efficiencies,” the report added.

 

Shekhar G Patel, president, Credai, said that developers, investors, and occupiers are now increasingly prioritising sustainability through green certifications, energy-efficient construction, and environmental, social and governance (ESG)-driven strategies.

 

“This shift has already gained momentum in the sector, with green building adoption increasing across residential, commercial, and industrial spaces,” Patel added.