Rise in Green Office Leasing Reflects India's Push Towards Sustainability

The demand for green office spaces in India is surging as companies increasingly seek to reduce their carbon footprints. In the April-June period, approximately 13 million square feet of office space in the top six cities was leased in green-certified buildings, according to a Colliers report. This marks a 24% increase year-on-year and represents an impressive 82% share of overall leasing during the quarter.

The report indicates that the majority of upcoming office spaces in various stages of construction are expected to be green-certified. This trend will expand the stock of green office spaces to over 600 million square feet within the next two to three years.

Arpit Mehrotra, Managing Director of Office Services, India at Colliers, highlighted that this growth reflects occupiers’ strong commitment to aligning their sustainability goals with national targets. Since 2023, engineering and manufacturing, technology, and BFSI sectors have predominantly occupied green-certified spaces, accounting for 70-80% of their total space uptake.

Occupier interest in green offices remains robust, with nearly 75% of leasing activity in the first half of 2024 directed towards these spaces. Bengaluru and Mumbai continue to lead the trend, together accounting for over 50% of green-certified leases in the second quarter of 2024.

The report notes that 60% of the 13 million square feet leased were in newer developments completed in the past five years. Prominent green certifications in the Indian market include LEED, GRIHA, and WELL, which assess buildings on parameters such as energy consumption, waste generation, and alignment with health and wellness standards.

Developers, investors, and occupiers have increasingly adopted sustainable practices in their portfolios. Additionally, the Securities and Exchange Board of India’s (SEBI) mandatory sustainability reporting has further motivated stakeholders to prioritize green portfolios to meet their Environmental, Social, and Governance (ESG) targets.