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This is our next special issue: a guest article on The Green Imperative of India’s commercial real estate market.

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Today’s guest authors are fellow Risers.

Shweta Sawhney is an absolute expert and long-term contributor to India’s commercial real estate markets. With past leadership roles at Savills, JLL and C&W, Shweta and her team are on a mission to digitise the whole transaction space, and Araddhna Mangala is diving deep into market research for Altre’s clients.

Altre supports global companies in India and those entering the country by finding the right physical footprint for their operations.

Let’s jump in.

From Shweta Sawhney and Araddhna Mangala

The global sustainability movement has reshaped how businesses, governments, and investors interact and engage with the built environment. In this transition, India’s commercial real estate (CRE) sector has emerged as a powerful fuel for change. What was once a niche movement is now the standard: green buildings have moved from the periphery to the heart of India’s urban and economic growth story. This transformation goes beyond being environmental stewardship, it is a strategic response to the expectations of global investors and corporations seeking future-ready, ESG-aligned assets.

As global corporations look for office spaces that comply with sustainability standards, India is establishing itself as the preferred hub for operations, innovation, and green investment. What sets India apart is the scale and speed of this transformation. For European stakeholders, this is an opportunity to look beyond traditional geographies and see India’s CRE sector as a partner in advancing global sustainability goals. With multinational corporations (MNCs) and Global Capability Centers (GCCs) leading the charge, India is offering not just compliance but a roadmap for future-ready infrastructure aligned with international standards.

India’s green building transformation is both a local environmental effort and a direct response to global business demands.

Sustainable buildings have now become normalized with mainstream adoption in India. Data from Altre’s platform reveals that 58% of the total office stock, or 707 million square feet out of 1,211 million square feet, across India's top 7 cities is now green-certified. A decade ago, office penetration stood at just 20%, underscoring an extraordinary rate of market adoption. The velocity of this transformation becomes even more apparent when examining recent leasing patterns. In Q1 2025, 80% of all leasing activity across India's top cities occurred in green-certified buildings.

This shift isn’t limited to traditional offices. India’s flexible workspace segment is experiencing accelerated growth, backed by

Companies increasingly demand shorter lease tenures, lower upfront costs, and workspace agility, needs amplified in a post-pandemic, cost-sensitive environment.

40% of existing flex seats across the top Indian cities are housed within green-certified buildings, up from single digits two years ago. According to data from Altre platform, 15% of all leasing in Q1 2025 came in flexible/co-working spaces. New GCCs entering India are driving this change, choosing flex spaces over traditional leases to achieve

Global Capability Centers and multinational corporations account for 65-70 % of net office leasing. Of these, 15-18 % are headquartered in Europe, as they actively seek eco‑friendly office spaces aligned with global ESG commitments. Commercial buildings are responsible for approximately 26% of operational emissions in the built environment and real estate responsible for up to 40% of global carbon emissions, making the built environment a critical component of India’s climate strategy.

Today’s occupiers, developers, managed office operators, and investors face mounting pressure from multiple stakeholders demanding ESG alignment. Employees want healthier work environments, while customers demand corporate environmental responsibility. Green buildings have become a tangible solution that addresses these converging demands while delivering measurable business value.

Real estate is emerging as a key lever for businesses and investors working to meet ESG commitments, reduce emissions, and respond to rising disclosure expectations. Among these, the European Union has taken a leading role by developing some of the most comprehensive sustainability frameworks now influencing

At the heart of this shift is the EU Taxonomy for Sustainable Activities. This system defines what all economic activities, including real estate, can be considered environmentally sustainable. It is designed to channel capital into buildings and projects that contribute meaningfully to the EU Green Deal, while improving investor protection and market comparability.

Within this framework, real estate and construction are among the most eligible sectors, with up to 87% of turnover falling under taxonomy scope. However, only

currently meet the taxonomy’s environmental criteria. This means companies are missing out on lower financing costs, higher asset values, and stronger investor appeal because most of their spending doesn’t yet qualify as “green.” By shifting more of their investments into Taxonomy-aligned projects, they could

Other frameworks, such as the Corporate Sustainability Reporting Directive (CSRD) and the Sustainable Finance Disclosure Regulation (SFDR), are further reinforcing these expectations. These frameworks require companies and financial products to report their sustainability performance, including how much of their business or portfolio aligns with mandated goals.

For European corporations operating in India, these regulations directly influence where companies locate, what kind of buildings they lease, and how those assets perform. Certifications such as LEED, IGBC, BREEAM, and WELL have become standard in India’s Grade A office segment. Certification is a starting point for participating in global corporate real estate portfolios. Developers must now show verifiable performance on energy efficiency, emissions, and indoor environmental quality that can appeal to ESG-focused tenants and investors.

India has emerged as a proactive participant in building the sustainable infrastructure that global companies need. Among India’s certified sustainable commercial buildings, a striking 81% hold LEED certifications, reflecting the dominance of international standards and their alignment with global benchmarks.

South India’s metros are setting the benchmark for green CRE. Notably, Bengaluru boasts approximately 212 million sq ft of green-certified office space, about 63% of its total stock, while Hyderabad and Chennai lead in market penetration at 79% and 78% respectively. These southern metros alone account for over half of India’s total green office inventory, reflecting strategic developer investment and tenant demand. Northern and Western markets are quickly catching up: Gurugram hits ~65% green penetration, Noida’s Expressway micro-market peaks at 80%, Mumbai stands at ~53%, while New Delhi currently trails, highlighting strong expansion potential beyond the South.

The country as a whole with all these interventions ranks third globally for LEED certifications as of 2024, with 370 projects certified in 2024 alone, covering 8.50 million gross square meters. This achievement places India ahead of markets like Hong Kong and South Korea and even surpasses high-growth markets like the UAE and Mexico.

For businesses and investors, the financial case for green buildings is just as compelling as the environmental one. Green-certified buildings consistently command premium valuations, reflecting their superior value proposition.

Data from Altre shows average premiums of 18-22% on rentals across India, with regional variations dependent on market dynamics and investment opportunities. In Bengaluru, a 4-6% premium reflects mature market dynamics, where sustainability has become a minimum tenant expectation. New Delhi leads with the highest premium at 70-74%, driven by limited green supply and strong asset positioning.

For flexible spaces, the national average sits in the 47–50% range, much above conventional spaces as many green-certified flex centers are located in Grade A+ buildings where green certification is just one part of a broader value proposition that includes superior fitouts, premium locations, and best-in-class amenities.

Highest premiums up to 90-95% in New Delhi and 68-72% in Mumbai are fueled by tight supply and sustainability-linked lease clauses. Cities like Chennai, Hyderabad, Bengaluru, and Noida show 35- 40% premiums, indicating growing value attribution and adoption beyond traditional gateway markets.

These premiums demonstrate market recognition of tangible business benefits rather than just mere environmental virtue signalling.

Green buildings deliver substantial operational advantages that translate directly to bottom-line impact through multiple channels of cost reduction and efficiency improvement. The operational benefits compound over time, creating increasing value propositions for long-term occupiers.

The human capital benefits (sourced from Science Direct, The Guardian, National Center for Biotechnology Information, and others) are perhaps the most critical aspect of this financial case:

Green buildings also provide strategic advantages that extend beyond immediate operational benefits. They support compliance with India’s 2070 net-zero commitment, offer better capital market access (with 100% of India’s office REIT stock being green-certified), and enhance market positioning by attracting ESG-conscious investors, tenants, and talent. These assets mitigate regulatory risks, strengthen brand value, and unlock government incentives for both occupiers and developers.

The convergence of Indian real estate and European ESG standards represents a rare and timely opportunity for businesses and investors to lead in a rapidly evolving market. As 80% of upcoming office supply targeting green certification and leasing trends suggest this figure could exceed 90% within the next 24 months, the window to secure first-mover advantage is narrowing.

For Indo-European stakeholders, this is an opportunity to seize this moment by prioritizing green-certified assets in their India strategies and leveraging technology platforms like Altre to navigate India’s complex market landscape. These tools enable smarter, faster, and data-driven decisions that reduce risk and accelerate growth.

India is actively shaping the global sustainability narrative. Organizations that act now will capitalize on operational and financial gains, strengthen ESG credentials, access sustainable capital flows, and future-proof their portfolios in an increasingly climate-conscious world.

This is a chance to create enduring value at the intersection of purpose and profit.

Sources: The Economic Times, UNEPFI, European Commission, Greenomy, Business Standard, India Green Building Council, The Guardian, National Center for Biotechnology Information, Crisil Ratings

If you want to explore more on this topic or have questions, please reach out to the authors via LinkedIn:

Shweta Sawhney and Araddhna Mangala

Link to full report: https://www.altre.co.in/research-and-insight/2025-cre-sustainability-report-the-green-imperative 

Disclaimer: any use of the data or graphics require prior approval by Altre Digital.

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