Demand set to outpace supply as occupiers aim for 100% green portfolio by 2030: JLL study

Mumbai: The emergence of environmentally conscious occupiers of commercial real estate prioritising the decarbonisation of their portfolios has led to a substantial increase in demand for sustainable buildings that is expected to outpace supply across key property markets of India.

With most corporate organisations aiming for a complete green and sustainability-certified office portfolio, the demand-supply gap for such properties will drive strong competition among occupiers and bring in higher rentals for property owners.

More than 80% of occupiers in the country plan to achieve 100% green certified portfolios by 2030, mar- king a significant increase from the current 3%. With only 4.5 sq ft of green certified top-quality office space available for every 10 sq ft of demand across India’s key markets of Mumbai and Delhi over the next five years, a considerable supply-demand gap of 55% is anticipated, showed a JLL India study.

As a result, occupiers foresee the possibility of increased rentals for sustainable spaces, presenting them with one of their top challenges in pursuing decarbonisation. This surge in demand for sustainable offices is taking place in the backdrop of 65% of top 100 осcupiers in Mumbai and Delhi have announced their corporate Net Zero Carbon (NZC) commitments and goals.

“As we approach 2030, the urgency for corporates to meet their NZC targets is mounting, placing increasing pressure on corporate real estate players. There is clearly a i supply-demand disparity in NZC buildings within India, particular. ly in cities like Mumbai and Delhi. Recognising this challenge, real estate players are proactively integrating sustainability considerations into their portfolio strategi- es,” said Radha Dhir, CEO and country head, JLL India

Amidst these challenges, according to her, lies a remarkable opportunity for real estate developers to embrace a comprehensive sustainable policy that encompasses renewable energy, sustainable technology, and clean energy practices.

By 2030, nearly half of Indian occupiers will insist on leasing exclusively with landlords who are willing to sign green lease agreements.

Half of occupiers are aiming to have green lease agreements with their landlords in the next three years, as part of their efforts to reduce operational carbon emissions thro- ugh better management of energy, water, and waste.

The biggest concern for corporate India is the possibility of intro- duction of carbon taxes or fines based on emissions. Seven out of ten commercial real estate leaders consider this to be an important issue that they need to actively plan for as part of their sustainability efforts.

A key concern among corporate India leaders is the potential intro- duction of carbon taxes or emissions-based fines, with 70% of commercial real estate leaders high- lighting this as an area of attention for their sustainability journey.

“Today, leasing office space in green certified buildings is no longer a differentiator but a minimum criterion for most occupiers in Asia Pacific. In addition, we are seeing more and more companies adopt sustainability strategies such as energy audits, sustainable fit-outs, and green leases to achieve sustainable workplaces,” said Kamya Miglani, head of ESG Research, Asia Pacific, JLL.

In the future, she expects occupiers to raise the benchmark and start demanding building performance and sustainability data over and above green building certifications to make sure that assets are aligned to their NZC goals.

Embracing renewable energy is seen as a vital step for the real estate industry’s transformation into active contributors to sustainability.

Source- The Economic Times

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