A new report by Altre Digital, a tech-driven commercial real estate consultancy, shows that environmental, social and governance (ESG) considerations are now driving where and how companies choose to occupy office space.
According to the report, which analysed over 3,000 buildings and 1 billion square feet across India’s top seven cities, green-certified conventional office spaces fetch 18–22% higher rentals, while flexible workspaces with green ratings attract 47–50% premiums.
“Commercial real estate is no longer being evaluated purely by location or amenities. Today, buildings are valued by what they conserve and enable—energy, water, health, and resilience,” said Shweta Sawhney, Founder and CEO of Altre Digital.
Green Buildings No Longer a Niche Offering
India has rapidly emerged as a global frontrunner in sustainable construction. In 2024 alone, 370 projects received LEED certification, covering 8.5 million gross square meters, placing India third globally, ahead of markets such as Hong Kong and South Korea.
Today, green-certified stock accounts for over 700 million square feet across key metros. The bulk of certifications are driven by LEED (81%), followed by IGBC (9%).
Bengaluru leads the green building inventory with a 30% share, followed by Mumbai (15%), Hyderabad (14%), and Pune (12%). Gurugram accounts for 11.5%, while emerging regions like Noida, Chennai, and New Delhi are also seeing increasing adoption.
Micromarkets such as Outer Ring Road in Bengaluru, Cyber City in Gurugram, and Hyderabad’s IT Corridor boast 90%+ green penetration, making them India’s most sustainable business districts.
Why Green Buildings Are in Demand
Despite the premium rents, green-certified office spaces have become the preferred choice for multinational corporations, institutional investors, and flex space operators. The reasons go far beyond optics:
- Energy Efficiency: Certified buildings deliver 30–50% savings on energy consumption, a major incentive as electricity costs rise.
- Lower Operating Costs: Maintenance expenses are typically 20% lower, thanks to superior design, automation, and resource management.
- ESG Compliance: With rising global scrutiny on sustainability, corporate occupiers are under pressure to meet ESG benchmarks in all aspects—including real estate.
- Employee Health & Productivity: Green buildings typically offer better indoor air quality, natural lighting, and wellness-oriented design, contributing to higher employee satisfaction and retention.
- Future-Proofing: Green buildings hold higher long-term asset value, resilience against climate risks, and alignment with investor mandates.
“In Q1 2025, 80 out of every 100 square feet leased was in green-certified buildings,” said Sawhney. “This is not just a sustainability story—it’s a performance story. The return on investment is real, measurable, and growing.”
Flex Workspaces See Highest Premiums
One of the most striking insights from Altre’s report is the surge in premiums for green-certified flexible workspaces. As companies move toward hybrid work models, demand for eco-conscious, plug-and-play office environments has surged, particularly in cities like Mumbai, Bengaluru, and Gurugram.
The report found that green-certified flex spaces earn nearly 50% more in rental value compared to their non-certified peers. This is driven by tech firms, global capability centres, and startups who prioritise flexibility, ESG alignment, and cost efficiency.
Institutional Investors Backing Green Assets
India’s green office transformation is also being driven by global and domestic institutional investors, who increasingly prefer assets with green certifications and long-term ESG alignment. With rising global capital flows into sustainable assets, developers are under pressure to deliver green projects that attract both tenants and long-term capital.
Altre Digital is a tech-enabled commercial real estate consulting platform that simplifies how businesses find, compare, and secure office space. The company tracks over 1,200 million sq. ft. of Grade A inventory and nearly 1 million flex workspace seats across India’s key markets.
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