The share of leasing of green buildings (sustainable buildings) has quadrupled during the 2022-2023 period, compared with the pre-Covid years of 2018-2019, a report released on Thursday said.
This translates to a 132% increase in leased area, from 3.7 million square feet to 8.6 million sq ft, the report by JLL and CRE Matrix said. “This remarkable surge serves as a testament to the joint efforts of asset owners and occupiers to promote responsible leasing practices in the industry,” it added.
The report examined over 1,530 leases encompassing more than 225 million sq ft from January 2018 to September 2023. Widespread adoption, however, is still a long way, and this can be attributed to the lack of industrywide guidance, transparency, legal complexities and split incentives. While the beginnings of change are already evident, India still has a long road to travel on the green lease continuum, the report said.
Global occupiers and institutional landlords are at the forefront of sustainable practices, with GCCs (global capability centres) accounting for over three-fourths of the overall green leasing activity in India. The two largest GCC markets of Hyderabad and Bengaluru lead the adoption, accounting for 64% of the overall green leasing in India, the report said.
“The Indian market is making significant strides towards sustainability and the increase in green-certified office penetration from 39% in 2020 to 53% in 2023 is a clear indication of this,” said Samantak Das, chief economist and head of research and REIS, India, JLL.
However, environmental performance results will still be lacklustre if the building is not operated efficiently. “Given the important role of occupiers in ensuring operational efficiency, moving from ‘traditional leases’ to ‘collaboration-based green leases’ that enable data sharing and active collaboration between building owners and occupiers is the need of the hour”, Das said.