Hyderabad Tops India in Green Office Leasing, Report Shows

Green-certified office spaces are emerging as the preferred choice in India's top commercial hubs, with Hyderabad registering the highest green penetration rate in Grade A office stock at 75 per cent in 2024. According to a joint report by CREDAI and Colliers, Hyderabad's leadership in sustainable office development highlights a broader shift towards green real estate across India.

In 2024, Hyderabad had 86.7 million sq ft of green-certified Grade A office space, with 8.4 million sq ft leased—68 per cent of total leasing activity in the city. Bengaluru followed closely, holding the largest share of India’s green office stock at 158.2 million sq ft and a penetration rate of 73 per cent. Delhi NCR stood third with 93.8 million sq ft of green-certified space and an 82 per cent share of green leasing.

Nationwide, approximately 503 million sq ft or 66 per cent of total Grade A office stock was green-certified as of the end of 2024. Bengaluru accounted for 31 per cent of this, while Delhi NCR and Hyderabad contributed 19 per cent and 17 per cent, respectively. Green leasing accounted for 74 per cent of India’s total leasing in 2024, totaling 49.1 million sq ft.

Office spaces certified as green have also proven more financially attractive. These buildings achieve higher occupancy rates—ranging from 80 per cent to 90 per cent—compared to 65 per cent to 85 per cent for non-certified buildings. Rental premiums are also higher, with Mumbai leading at 24 per cent, followed by Chennai (16 per cent), Hyderabad (14 per cent), and Delhi NCR (13 per cent).

Over the next two to three years, India’s green-certified office inventory is projected to grow to nearly 700 million sq ft, driven by new developments and strong occupier demand. Currently, around 80 per cent of new Grade A office supply added between 2020 and 2024 is green-certified. Approximately 75 per cent of office leases in 2024 were in sustainable buildings, a figure expected to rise to 80-85 per cent in the coming years.

Retrofitting older buildings presents another avenue for sustainability investment. More than 350 million sq ft of office space over 10 years old is ripe for retrofitting, offering an investment potential of Rs 425 billion. Additionally, up to 110 million sq ft of relatively newer office buildings could be upgraded with lower capex, unlocking further sustainability benefits.

Beyond offices, green adoption is expanding to other real estate segments including data centers, healthcare, hospitality, and retail. Data centers, in particular, are focusing on renewable energy and efficiency improvements as capacity is set to surpass 3,500 MW in the next 3–5 years.

As of 2024, India’s total green-certified footprint across asset classes reached 13 billion sq ft. This includes more than 2 million certified residential units, over 6,500 commercial buildings, and 750 industrial projects. The demand for energy-efficient, environmentally responsible spaces is rising, fueled by regulations, climate targets, and investor interest.

Green-certified buildings have also become prominent in REIT portfolios, reflecting investor alignment with ESG objectives. Market participants suggest that sustained policy support, faster environmental clearances, and fiscal incentives for green infrastructure could accelerate the transition towards a low-carbon built environment.

Real estate developers and occupiers are recognizing the operational and economic advantages of green buildings, from reduced energy costs to improved tenant retention. The nationwide push signals a long-term commitment to sustainable development across India’s property market.