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Green Office Leasing Trends in India

Green Leasing

The green office leasing sector in India has witnessed significant growth and adoption in recent years, with a notable increase in the share of green office leases and the emergence of key market leaders in sustainable practices.

Increase in Green Office Leasing

  • Share of Green Office Leasing: The share of green office leasing in India has surged to 16% in the 2022-2023 period, marking a significant increase from the pre-COVID years.
  • Growth Predictions: The JLL – CRE Matrix report anticipates that the share of green office leasing is expected to reach 20% within the next year, highlighting the growing momentum towards sustainable leasing practices.

Market Leaders and Location Trends

  • Global Capability Centers (GCC): Global Capability Centers and institutional landlords have been at the forefront of driving sustainable practices, accounting for 76% of overall leases.
  • Leading Markets: Hyderabad and Bengaluru have emerged as the leading markets for green office leasing, constituting 64% of the total green lease market in India.

Analysis of Leases

  • The data revealed a substantial increase in leased area, with a 132% rise from 3.7 million square feet to 8.6 million square feet during the 2022-2023 period compared to the pre-COVID years.

Driving Factors and Challenges

  • Sustainable Practices: The joint efforts of asset owners and occupiers have been instrumental in promoting responsible leasing practices in the industry.
  • Challenges: The lack of industry-wide guidance, transparency, legal complexities, and split incentives have been identified as barriers to the widespread adoption of green leasing practices.

Key Aspects of Green Leasing

  • Focus Areas: Green leasing clauses primarily focus on waste management, energy efficiency, and data sharing, with a strong emphasis on reducing carbon footprint and promoting sustainable practices.
  • Energy Efficiency: Multiple clauses are centered around energy efficiency as an important instrument for reducing a building’s carbon footprint.

Expert Insights

  • Samantak Das: Samantak Das, Chief Economist and Head of Research and REIS, India, JLL, highlighted the incorporation of sustainability into the boardroom agenda and the significant progress towards sustainability in the Indian market.
  • Abhishek Kiran Gupta: Abhishek Kiran Gupta, CEO and Co-founder of CRE Matrix, emphasized the potential for green leasing to reach around 20% penetration within the next 1-2 years, with anticipated benefits for both landlords and occupiers.

Future Outlook and Mission

  • Environmental Sustainability: The realty sector is expected to play a key role in achieving environmental sustainability goals, with a shift towards green leasing being a crucial focus for the next two decades.
  • Emission Reduction Targets: India aims to reduce GDP emissions by 45% by 2030 and achieve net zero emissions by 2070, with the realty sector expected to contribute significantly to this mission.

The surge in green office leasing in India reflects a growing commitment to sustainable practices within the real estate sector. While challenges exist, the collaborative efforts of stakeholders and the potential for significant rental arbitrage demonstrate the promising trajectory of green leasing in the country.

As the industry continues to evolve, the adoption of green leasing practices is expected to play a pivotal role in driving environmental sustainability and operational efficiency within the commercial real estate market.

Download the full Report – Green Leasing Office Report

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Commercial Real Estate Predictions for 2024

Future of commercial real estate

Explore the future of commercial real estate in India through our blog, where we delve into the surge of green leasing, the dynamic world of flex spaces, and key market insights for 2024.

The Rise of Green Leasing

What is Green Leasing: Green leasing involves renting or leasing commercial spaces in buildings that adhere to environmentally friendly and sustainable practices. These buildings are designed to minimize their impact on the environment through energy efficiency, waste reduction, and the use of eco-friendly materials.

In 2024, we foresee a remarkable surge in green leasing, a well-established preference among market clients. Historically, green leases accounted for approximately 15% of total leasing, but this figure is set to soar beyond 25%.

The allure of green buildings is undeniable, prompting landlords to position them as a key differentiator.

Premium Rentals: Green buildings will command a premium rental, with the gap between green and non-green leases widening to 15% in 2024. This underlines the growing emphasis on sustainable practices in the commercial real estate sector.

Flex Leasing

What is Flex Leasing: Flex leasing is a dynamic approach to office spaces that allows businesses to rent flexible and customizable workspaces. These spaces are designed to provide a versatile and adaptive environment, allowing companies to scale their office space based on their needs.

The contribution of flex leasing to total leasing in India is poised to rise from 11% in 2023 to an impressive 15% in 2024.

Major occupiers are expected to explore flex spaces, driven by the need for enhanced flexibility, a better work experience for employees, and increased convenience.

Supply and Demand Insights

Looking at the supply and demand game, Pune and Hyderabad are set to supply 60% of new offices in the next three years.

Why Does This Matter?: It opens the door for cities like Pune, Noida, and Navi Mumbai to offer more affordable options for businesses who aren’t fixed on being in the South.

Hotspots: The Macro Markets of 2024

The pulse of office leasing in India will resonate in five macro markets:

  1. Gachibowli & High-tech City (Hyderabad)
  2. Noida (NCR)
  3. Navi Mumbai (Mumbai Region)
  4. Nagar Road Kharadi (Pune)
  5. Outer Ring Road (Bangalore)

These markets are destined to play a pivotal role in defining the trajectory of office leasing in the country in 2024. Subscribe to CRE Matrix for more in-depth Real Estate Data Analytics.

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Chintels India gives rights to Sobha Group for two land parcels for Rs 121.82 crore near Dwarka Expressway

Chintels buy land parcel

The transaction is the most recent in a series of important land deals in the NCR. The sale transaction was executed on December 22, 2023, and the company paid stamp duty of Rs 6.07 crore for the 5.78-acre plot and Rs 2.45 crore for the 2.06-acre property piece, according to documents.

Chintels India, a Gurugram-based real estate developer, has transferred ownership of two land parcels valued at Rs 121.82 crore and covering a total area of 7.85 acres to listed real estate developer Sobha Ltd in Gurugram, according to documents accessed by CRE Matrix.

Both developers stated that the land parcels were part of their joint venture project, ‘International City’.

According to the documents, one land piece, totaling 5.788 acres, is in sector 108, and the second plot, measuring 2.06 acres, is in sector 109. Both properties are in Babupur village, close the Dwarka Expressway, which is expected to be operational soon.

According to the records, the 5.7-acre land costs Rs 86.82 crore, while the 2.06-acre plot is worth Rs 35 crore. The total worth of both plots was Rs 121.82 crore.

The conveyance deed was executed on December 22, with Sobha Ltd paying a total stamp duty of Rs 8.53 crore for both plots, according to the documents. The company paid stamp duty of Rs 6.07 crore for the 5.78-acre property and Rs 2.45 crore for the 2.06-acre land parcel.

Chintels India was embroiled in controversy after six floors of Tower D in the Chintels Paradiso housing complex in Sector 109, Gurugram, collapsed in February 2022, killing two ladies. Following the incident, a structural safety audit of the housing complex determined that five of Chintels Paradiso society’s nine buildings were “unsafe to live” in.

According to a representative for Chintels India, the 5.7-acre site is the commercial portion of the leased land known as ‘International City’, and it is entirely allocated to Sobha under our existing JD Agreement. Ownership was transferred to Sobha in December 2023, and we received no consideration because it was always part of Sobha’s allocation. The 2.06 acres are the clubhouse of International City, which was originally assigned to Chintels but has since been transferred to Sobha.”

“These transactions are both old and part of our existing JDA for International City and the conveyance has taken place recently post fulfillment of mutual obligations,” stated a representative for the company.

Similarly, a spokeswoman for Sobha Ltd stated that the transaction is part of an old payment of a continuing partnership account, which culminated in the registration of specific land in ‘International City’.

According to experts, the anticipated opening of the 26.7 km Dwarka Expressway, which connects Dwarka in New Delhi to the Kherki Dhaula toll plaza on NH-48 in Gurugram, has made this area one of the most sought-after micro markets in the National Capital Region, with several new projects emerging in recent years.

The land transaction is the latest in a string of major deals in the NCR. Countrywide Promoters, a subsidiary of developer BPTP Group paid Rs 87.27 crore in November for a 5.24-acre land in Gurugram’s Sector 113, near the Dwarka Expressway.
Last September, Aamor Inox, a stainless steel bar maker, paid Rs 87.5 crore for 12 bighas of farmland and a farmhouse from Mastcraft Properties in Rangpuri, South Delhi.

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Bhuvan Bam bought a bungalow for Rs 11 crore

Bhuvan Bam

The sale deed was signed in Bam’s name on August 7, 2023. Bam paid a stamp duty of Rs 77 lakh on the transaction.

According to documents accessed by CRE Matrix, Bhuvan Bam, a YouTuber, comedian and actor purchased a property in South Delhi’s Greater Kailash Part 3 region for Rs 11 crore.

The sale deed was signed in Bam’s name on August 7, 2023. Bam paid a stamp duty of Rs 77 lakh on the transaction. The documents have only recently become available.

According to the documents, Bam purchased a Bungalow that measures 207.41 square meters (2,233 square feet). The home is situated on a 180 square meter plot in Greater Kailash 3, a premium suburb in South Delhi.

According to the records, the property is worth around Rs 4.78 crore based on the circle rate.

Big-ticket deals.

This is the most recent in a series of high-value real estate deals in the Delhi-NCR region. In October 2023, an 11,000 sq ft flat at The Camellias by DLF on Gurgaon’s Golf Course Road was resold for more than Rs 100 crore.

In the same month, MakeMyTrip group CEO Rajesh Magow paid Rs 33 crore for a 6,428 sq ft apartment at DLF Magnolias in Gurugram, while Genpact chief human resources officer Piyush Mehta paid Rs 32.60 crore for a 6,462 sq ft unit in the same complex.

Similarly, Vasudha Rohatgi, wife of former Attorney General of India Mukul Rohatgi, paid Rs 160 crore in February 2023 for a 2,100 square yard (18,900 square foot) villa in Delhi’s posh Golf Links.

Peyush Bansal, the co-founder of Lenskart, paid Rs 18 crore for a house in Neeti Bagh, an affluent neighbourhood in May 2023.

In February 2023, Bhanu Chopra, the creator of RateGain, paid Rs 127.5 crore for a bungalow in Golf Links.

If you are a developer or broker, you can empower your decision-making with data-driven insights through CRE Matrix. You can get details such as the entire tenure, tenant names, expiry dates, lock-in expiry dates, CAM charges, deposits, and more for any real estate asset in India. Book a demo at CRE Matrix to unlock the full potential of real estate data.

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BPTP Group’s Countrywide Promoters Secures 5.24 Acre Plot

Dwarka_Expressway

With the upcoming completion of the 26.7 kilometer Dwarka Expressway, the surrounding neighborhood has become one of the most sought-after micro markets in the National Capital Region.

According to documents accessed by CRE Matrix, Countrywide Promoters, a subsidiary of developer BPTP Group, paid Rs 87.27 crore for a 5.24-acre plot in Gurugram near the Dwarka Expressway.

The sale deed was executed on November 16, 2023, and the company paid a stamp duty of Rs 6.11 crore for the deal.

According to the records, the land was purchased from Vikram Rana and Paramjeet Rana of Bijwasan village in New Delhi. The site is located in Chauma village in Gurugram’s Sector 113, close to the Dwarka Expressway, which is expected to open soon.

The opening of the 26.7 km Dwarka Expressway, connecting Dwarka in New Delhi to the Kherki Dhaula toll plaza in Gurugram, has made this area a hotspot in the National Capital Region. Many new projects have sprung up in recent years because the improved connectivity has made it a popular choice for real estate development and investment.

This is the latest in a string of major transactions in the NCR. Aamor Inox paid Rs 87.5 crore to Mastcraft Properties in South Delhi’s Rangpuri in September 2023 for 12 bighas of farmland and a home.

Also that month, Laxmi Devi Agarwal, the wife of Devkinandan Agarwal, the proprietor of GR Infraprojects, paid Rs 86 crore for a 1,200 square-yard bungalow in Vasant Vihar, a prominent Delhi locality.

In February 2023, a 2,160-square-foot bungalow in Delhi’s affluent Golf Links neighborhood was purchased for Rs 160 crore in the name of Vasudha Rohatgi, wife of former Attorney General of India Mukul Rohatgi.
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