- Almost 44% of the total
office building stockin the top seven cities in Indiais green certified, says a JLLreport.
- Delhi NCR and Mumbai, which represent more than 41% of the total green certified stock in the country.
- In green-certified IT buildings there is an average rental premium of 13%.
Nearly 44% of the total stock of office buildings in India’s seven largest cities is green certified, says a report from
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The JLL report also sheds light on why green buildings are becoming popular. “Going green has its advantages. There is an average rental premium of 13% in green certified IT buildings and an average premium of 36% in non-IT buildings,” the report said.
Green buildings, also known as sustainable buildings, use sustainable materials and processes and contribute to the efficient use of natural resources such as energy and water, reduce pollution and use waste-reducing measures.
Organizations like to choose office spaces that help them reduce CO2 emissions, and this drives the demand for green buildings.
“Even in the two-year period immediately prior to the pandemic, the share of gross rental in green-certified buildings was higher at 53% and increased further to 57% during the pandemic period. This clearly outlines the larger shift underway in user preferences for sustainable, green-certified buildings,” said Radha Dhir, CEO and country head – India, JLL.
Green buildings are less likely to remain empty, more likely to receive a premium
In addition to higher rents, green buildings are also less likely to be vacant. According to Dr. Samantak Das, chief economist at JLL, vacancy rates are 3-12% lower in green buildings in prominent sub-markets. In
He says that rent premiums go up to 15-54% for green buildings, while the non-green counterparts deal with brown discount – an assessment term that describes buildings that will require maintenance investments in the future.
“In all core submarkets in the top seven cities where IT/IT SEZ projects account for a significant portion of the total A inventory, green-certified buildings have higher occupancy rates compared to non-certified counterparts,” said Das.
Overall, the majority of India’s A-shares are primarily for IT/IT SEZ usage – and this share stands at 71%. Half of this stock is green certified. For the non-IT stocks, the green penetration is much lower at 28%.
“The lower vacancy rate in this green-certified non-IT stock also underscores the impact of green certifications on users’ space decisions, more so in the case of their corporate offices that are representative of the companies’ ethos and corporate social responsibility statements. ,” he added.
The report predicts that in the next ten years, penetration levels of green certified buildings will exceed 50% in total.
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