Green label losing edge as occupiers seek performance data, retrofit-ready offices: Grant Thornton
New Delhi, September 29
Green certification alone is becoming less of a differentiator in India's office market, as occupiers increasingly seek measurable performance data, operational efficiency and retrofit readiness before taking leasing decisions, according to a report by Grant Thornton Bharat.
In its report, Grant Thornton said the next phase of green real estate will move beyond certification labels and place greater emphasis on how buildings actually perform.
"The next phase of green premium will move beyond certification labels. As occupiers, lenders and investors seek measurable performance, assets will need stronger data systems, better operating benchmarks and clearer decarbonisation roadmaps," the report said.
The shift is becoming more visible in Grade A office markets, particularly among multinational companies and Global Capability Centres (GCCs), where sustainability data is increasingly being considered during site selection and lease renewals.
Grant Thornton said green certification and operating-performance data are increasingly embedded in leasing decisions, while sustainability is becoming a core occupier requirement rather than merely a differentiating feature.
The report, however, said certification by itself does not guarantee a premium for landlords.
"For landlords, the premium is not automatic. It is strongest where certification is supported by location, tenant quality, operating efficiency, building management data and a credible decarbonisation roadmap," it said.
The changing requirements could also increase pressure on older office buildings that do not have strong sustainability credentials or cannot be easily upgraded.
"Older assets with weak sustainability credentials may face a brown discount if they become costlier to lease, finance or retrofit," the report said.
Grant Thornton expects retrofitting to become a major opportunity as older buildings seek to remain competitive, while green leases are also likely to become more common as occupiers demand greater access to energy, water and other sustainability data.
"In the long term, performance data, retrofit readiness and climate resilience will determine whether assets preserve value or face obsolescence," the report said.
The report added that sustainability is increasingly becoming part of how asset quality is assessed, with occupiers and investors placing greater weight on measurable efficiency, resilience and long-term operating performance rather than certification alone.
— ANI
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