India's green building market to grow over 10 pc annually to $85 billion by FY32

New Delhi, Oct 27 (IANS) India’s green building market is projected to grow at a 10.5 per cent compound annual growth rate (CAGR) until FY 32, to an opportunity size of $85 billion, a report said on Monday.

The strong growth in certified spaces is driven by investor and tenant demand amid rising absorption and tightening supply, according to the report by investment banking firm Equirus Capital.

The report said that certified supply in the market over the past 5.5 years was three times higher than non-certified supply, with absorption rates approximately 1.75 times higher than non-certified space, reflecting occupiers’ clear preference.

Between 2020 and H1 2025, leasing in certified spaces outpaced new certified supply by 6 per cent, intensifying competition for green spaces, the investment banking firm said.

India has retained third place worldwide in LEED certifications for green buildings, according to the note.

Certified buildings deliver stronger financial returns, lower operating costs, and enhanced brand and occupier value across markets, Equirus Capital said. According to the firm, green-certified assets have a 7-14 per cent higher sale price premium, a 7–14 per cent higher rental premium, 30–50 per cent lower energy use, and 20–30 per cent less water use.

The firm emphasised the premium in financial returns due to certification, mentioning that IGBC Platinum-certified luxury residences in Bengaluru achieved a 12 per cent resale premium compared to nearby conventional projects

Similarly, a LEED Gold office complex in Gurugram reported 18 per cent higher rental values and a 10 per cent lower vacancy rate than peers.

One of the largest LEED Platinum-certified campuses in Asia reduced operational costs by Rs 6 crore annually, improving long-term valuation in Mysuru, the report noted.

It also cited examples abroad, saying that US Market Green offices fetch 8–10 per cent higher rents and Singapore BCA Green Mark-certified assets trade 15 per cent faster.

--IANS

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