Green-compliant office buildings boom in India

CBRE South Asia released its report titled, 'Indian Real Estate: Taking Giant Strides - 2023 Mid-Year Outlook' at the CII Realty 2023 conference. The CBRE-CII joint report highlights the real estate growth in India, key trends, and projections for the Indian Real Estate sector for remaining period of 2023.

According to the report, owing to the growing focus of developers and occupiers on sustainability, green-certified office stock in India has increased by over 36% since 2019 to about 342 mn sq ft across top six cities in India. Bangalore, Delhi-NCR and Mumbai are among the top 3 cities spearheading green-compliant office spaces with a cumulative share of ~68% of the total, green-certified office stock in India as of June 2023. Certified green office stock also increased substantially, growing at a CAGR of ~7.1% in the last ~5 years.

Enhanced focus on global and domestic Environmental, Social and Governance (ESG) regulations are driving occupiers' flight-to-quality wave towards modern, premium and sustainable spaces in the medium to long term. Sustainable building features and operations are increasingly becoming developers' and occupiers' most sought-after building attributes.

As per the report, Bangalore tops all Indian cities with the highest green-compliant office stock, accounting for ~30% of the total pan-India stock, followed by Delhi-NCR with ~21% and Mumbai with ~17% of the total certified office stock in India as of June 2023. Green office stock in Hyderabad accounts for ~15%, Chennai 9%, and Pune 8% of the total pan-India stock.

Global and domestic occupiers are prioritizing sustainability and have committed to targets with far-reaching impact. Global and national mandates, including the Corporate Sustainability Reporting Directive (CSRD), Enhancement and Standardization of Climate-related Disclosures, and India's Business Responsibility and Sustainability Reports (BRSR), push occupiers to continue leasing in next-generation, green-certified office spaces.

Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, said, “The Indian real estate sector has demonstrated remarkable resilience in Jan-Jun'23, despite a global economic slowdown, primarily fuelled by robust domestic demand. In line with most major economies globally, the rate hike cycle in India seems to have come to a halt, with the RBI maintaining the status quo in the past two reviews. As the economic gains momentum and the real estate sector thrives, there is a growing emphasis on ESG and its compliance. We anticipate accelerated demand in modern, tech-enabled, and green- compliant spaces in the upcoming quarter. Additionally, we also expect alternative segments such as GCC's, data centres and flexible workspaces to play a pivotal role in bolstering real estate growth”.

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