Hyderabad Leads In Green Grade A Office Stock Use At 75%

Developers, investors and end-users are increasingly aligning their decisions with environmentally responsible practices, recognising the long-term benefits of energy efficiency, reduced operational costs -- Badal Yagnik, Chief Executive Officer, Colliers India

Hyderabad: Among the top six cities in India, the penetration of green certified buildings is the highest in Hyderabad at 75 per cent, in 2024, according to a report.

Credai and Colliers partnered for the report, “Sustainability in Real Estate: Towards a Greener Skyline.” The report, released on Friday, mentions that Hyderabad has recorded green building stock of 86.7 million sft, which is 75 per cent of the total Grade A office inventory. Such green certified office stock are witnessing positive leasing activity, wherein 84 lakh sft of green Grade A office stock has been leased by companies, which is 68 per cent of the total office leasing activity.

“Developers, investors and end-users are increasingly aligning their decisions with environmentally responsible practices, recognising the long-term benefits of energy efficiency, reduced operational costs. In particular, office leasing trends emphasise corporate advocacy of green certified workspaces and long-term commitment towards adoption of sustainable practices within the built environment,” Badal Yagnik, Chief Executive Officer, Colliers India, said.

The report further mentions that occupancy levels in Grade A green office buildings in Hyderabad is at 80 per cent, and such offices are commanding a rental premium of 14 per cent.

Across the top six cities, green-certified office stock in India stood at about 503 million sft, representing 66 per cent of the total Grade A inventory in 2024. With majority of the upcoming commercial developments expected to become sustainable from the outset, the green certified Grade A stock in the country is likely to reach close to 700 million sft over the next two – three years.

On the supply front, over the last five years about 80 per cent of the new Grade A office supply has been green certified. The surge in green building supply is driven by a shift in occupier preferences, with 75 per cent of leases in 2024 being transacted in green certified buildings. Overall, leasing volumes in green certified buildings grew 20 per cent annually to reach nearly 50 million sft in 2024, according to the report.