Sustainable Real Estate: The Future of India's Urban Landscape

The Indian real estate sector is at a critical juncture where the need for sustainable practices is increasingly being weighed against the pressures of economic development. As a foundation of the country's economy, the real estate sector plays a pivotal role in India's overall development and growth. However, achieving a balance between sustainable practices and economic development requires careful consideration of economic realities and the implementation of innovative solutions that can drive growth while preserving natural resources.

With rapid urbanisation, a growing middle class, and increasing investments from both domestic and international players, the sector is expected to reach a market size of $1 trillion by 2030. According to a NARDECO report, the real estate sector contributes 7 per cent to India's GDP as of 2023 and is projected to reach 13 per cent by 2025.

Driven by the demand for residential, commercial, and industrial spaces, the sector is undergoing a transformation that aligns economic growth with sustainable practices. Initiatives like the Smart Cities Mission, affordable housing schemes, and amendments in regulatory frameworks such as the Real Estate (Regulation and Development) Act have further catalysed its growth, fostering a shift towards transparency, accountability, and sustainability. The introduction of sustainable development practices, green buildings, and smart infrastructure aims to balance economic gains with environmental responsibility, redefining the future of real estate as it stands at a crucial crossroads where sustainability meets economic development.

The increasing global awareness of the environmental impact of urbanisation and construction is driving the demand for real estate projects that deliver economic value while adhering to sustainable practices. This is particularly crucial in India, where rapid urbanisation is coupled with pressing sustainability challenges. As India strives to achieve its 2070 net zero goals, there is a growing emphasis on developing real estate projects that not only support economic growth but also contribute to the country's sustainability objectives. This shift towards greener construction practices is essential for balancing the demands of development with the need to minimise environmental impact, ensuring a sustainable future for India's urban landscape.

Real Estate Trends in India: A Shift Towards Sustainability

India is experiencing a significant shift towards sustainable development. The country's real estate sector is increasingly aligning with global sustainability standards. The Indian government's focus on smart cities, green buildings, and sustainable urban planning is driving this transformation.

The green building movement in India is gaining traction, with the Indian Green Building Council reporting over 11,053 projects with a green footprint of over 10.27 billion sq. ft. as of 2024. Additionally, 248 projects across both buildings and spaces have been certified for LEED (Leadership in Energy and Environmental Design) in the country, covering 7.23 million Gross Square meters. This growth is a testament to the increasing awareness and adoption of sustainable building practices across the country. The use of energy-efficient building materials, renewable energy sources like solar panels, and water conservation techniques is becoming standard in new projects. 

Furthermore, technological advancements such as building information modelling, the Internet of Things, and smart building systems are being widely utilised to optimise resource use and enhance decision-making regarding sustainability.

Economic Benefits of Sustainable Real Estate

While sustainable real estate development involves upfront costs, it offers substantial long-term economic benefits. Green buildings, for instance, can reduce energy consumption by 20–30 percent and water usage by up to 50 per cent. These savings translate into lower operational costs, making such properties more attractive to investors and occupants. Moreover, green-certified buildings command a 12 per cent to 14 per cent premium on average over non-green buildings. This demonstrates that developers are rewarded for initial investment.

Promoting Sustainable Real Estate Practices

The World Trade Centres Association has been a strong advocate for integrating sustainable practices across its global network of 300+ World Trade Centre (WTC) businesses across nearly 100 countries and has been a social actor with intergovernmental organisation status with the United Nations Economic and Social Council, as well as an active participant in the United Nations Global Compact since 2020, where businesses come together in support of the United Nations’ 17 Sustainable Development Goals (SDGs). 

Several WTC businesses have embraced green building practices. These practices focus on the use of sustainable materials, energy-efficient designs, and renewable energy sources to minimise environmental impact. As a result, a growing number of WTC-branded properties worldwide have achieved LEED certification, which is a globally recognised symbol of sustainability achievement. 

In addition to new developments, retrofitting existing buildings to enhance energy efficiency is also gaining momentum. A prime example is WTC Rotterdam, a historic landmark in the Netherlands originally built in 1937 and extensively renovated to blend its architectural heritage with modern, sustainable elements. 

The building now features a green rooftop ecosystem, 340 solar panels, and advanced energy-efficient systems, serving as a future-proof model of sustainable development. 

Another notable trend is the "Live-Work-Play" concept, which combines office spaces, residential units, retail shops, food and beverage outlets, and entertainment facilities within a single development. This approach significantly reduces the need for long commutes, lowering carbon footprints, and promoting a more vibrant, self-sustaining community. In addition to sustainability, these mixed-use developments offer convenience and improve the overall quality of life for residents and workers by creating accessible, walkable environments that cater to daily needs. This model is increasingly being adopted in India’s metropolitan cities like Mumbai, Bengaluru, and Delhi, where urban sprawl and long commute times present significant challenges. Building on this concept, the newly licenced WTC Future City in India is advancing plans for Telangana’s first self-sustained mini-smart city designed to integrate offices, retail spaces, entertainment zones, luxury hotels, and co-living spaces. The development will be powered entirely by green energy.

Challenges and Opportunities in Balancing Sustainability and Economic Growth

Despite the encouraging trends, there are significant challenges in balancing sustainability and economic growth in real estate. High initial investment costs, a lack of adequate incentives, and fragmented regulatory frameworks often deter developers from adopting green practices on a larger scale. However, the Indian government’s push towards green infrastructure, as evidenced by recent budget announcements focussing on sustainability, offers a promising path forward. The Finance Minister's announcement of substantial allocations for green infrastructure, along with incentives for sustainable practices, is a step in the right direction. Programmes like the Pradhan Mantri Awas Yojana (PMAY) promote the use of sustainable building materials and practices, fostering affordable yet green housing solutions.

The Road Ahead

The future of real estate lies in achieving a harmonious balance between economic development and sustainability. For India, this balance is crucial to ensuring that its urban growth is not only economically viable but also environmentally sustainable. The support of global networks like WTCA and the active participation of stakeholders across the board, from policymakers to developers, are vital in driving this change. As the real estate sector evolves, the integration of sustainable practices will not only contribute to environmental preservation but also enhance economic resilience and quality of life for future generations.

(Scott Wang is the Vice President of WTCA, Asia Pacific.)