Bengaluru: Indian offices, totalling 300-350 million sq ft, are set to undergo a makeover as companies prioritise compliance with ESG (environmental, social, and governance) norms and eco-friendly operations, according to Colliers. Currently, 61% of Grade A office space in India, totalling 432 million sq ft, is certified as ‘green’, showcasing a pronounced inclination toward sustainable features.

This trend signals a paradigm shift in favour of green real estate portfolios among developers, occupiers, and investors.

Going forward, the industry expects more developers and investors to incorporate eco-friendly considerations across the entire project life- cycle, from pre-construction to operational phases, to ensure compliance with ESG norms.

According to Colliers, around 400-460 million sq ft of existing office stock will achieve full compliance in the coming years. Grade A office buildings less than 10 years old totalling 95-110 million sq ft show promise for e compliance with minimal capital expenditure for upgrades, while older buildings totaling 300-350 million sq ft would require comprehensive refurbishment through retrofitting.

The real estate consultancy estimates the cumulative investment potential for ESG-focused real estate in existing Grade A office stock at nearly ₹40,000 crore. Colliers India, said upcoming commercial developments will contribute to increasing green certified Grade A office space to more than 550 million sq ft by 2026.

“Recognising the pivotal role of sustainability in real estate, developers are strategically emphasising on green certification processes. In an environment of increasing E-adoption, assessments, and compliances, almost three- fourths of India’s Grade A office stock will be green certified by 2030. Green and sustainable elements will soon become hygiene factors in the Indian office market,” said Jatin Shah, managing director, technical advisory services.

According to the report, e-upgrade of existing buildings will boost net cash flows by three to four times for property developers with such upgrades comprising about 5-10% of the construction cost. Consequently, tangible benefits include about 20-30% energy savings and 5-10% rental appreciation, offsetting initial investments within the initial years.

“We are in the midst of a green trans- formation in the Indian real estate landscape with 61% of Grade A office space totalling 432 million sq ft now being green certified. The emergence of ESG-compliant REITs such as ours, indicates a clear shift in consumer preferences and investment strategy,” said Ramesh Nair, CEO, Minds- pace Business Parks REIT. The shift towards sustainable offices is crucial as India contributes to about 7.3% global emissions with real estate being one of the largest contributors.

Source- The Economic Times

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