The report highlights LEED, GRIHA, and WELL building certifications as primary sustainable rating systems used in commercial real estate development.
A report jointly prepared by KPMG in India and Colliers underlines the transforming impact of sustainable real estate practices in the industry. Green buildings have shown potential to reduce emissions by 35% and bring down maintenance costs by 20%. This shift towards sustainability is evident, with over 61% of Grade A office stock in India being green as of 2023.
The report brings attention to the alarming contribution of the real estate sector to global carbon emissions, accounting for nearly 40% of the total emission. It highlights the impending challenge posed by existing building stock, set to continue contributing to CO2 emissions by 2040, potentially hindering the goal outlined in the Paris Agreement to limit the temperature increase to 1.5 degrees.
The report identifies LEED, GRIHA, and WELL building certification as the key rating systems adopted by developers to build sustainable commercial real estate. It also outlines India’s sustainability goals, including achieving net zero greenhouse gas emissions by 2070 and drawing 50% of energy from renewables by 2030.
In India, the penetration of Grade-A green office stock has been significant in metropolitan and Tier-1 cities, accounting for 421 million square feet. The report indicates that between 16% to 26% of aging buildings in the top six cities have scope for renovation to improve building performance.
Recognizing the critical need for sustainable practices in the real estate sector, it emphasizes how adopting these practices is no longer an option but a necessity. The integration of sustainable solutions across project life cycles has gained momentum from both developers’ and occupiers’ perspectives.
"Green certified office buildings have almost doubled since 2016 to an impressive 421 mn sq ft, forming over 61 per cent of India's Grade A office stock. This showcases developers’ & occupiers’ rising commitment towards sustainability. This is likely to reflect in terms of favorable pricing and asset valuation resulting in increased brand value, client retention & rental upside. As the industry looks into the future, developers and investors alike, are likely to remain focused on high performing assets as more occupiers will scout for sustainable workspaces." said Badal Yagnik, Chief Executive Officer, Colliers India