Transforming Indian Real Estate for a Sustainable Future

Mitesh is an experienced partner with a demonstrated history of working in the real estate industry & interior designing. With a Master of Business Administration (MBA) degree focused on computer technology/computer systems technology from Lala Lajpatrai Institute of Management, Mitesh is skilled in business ideas, business planning, computer science, and sales.

India's rapid urbanization puts real estate at an exciting crossroads where economic growth meets sustainability. As one of the country's major contributors to GDP, real estate and construction play an essential part in the economy and help it meet its ambitious net-zero emissions goals by 2050. Sustainable development practices provide an effective means of achieving steady growth while mitigating environmental impacts, offering an exciting path forward.

Current Growth Scenario

According to a recent NAREDCO and KPMG survey, real estate plays an essential part in India's economy. It contributed 7% to GDP in 2023 and is projected to increase further by 2025. Demand across residential, commercial, and industrial sectors, an expanding middle class, urbanization, and investment are helping this sector grow significantly. By 2030, its market could reach a $1 trillion value, necessitating sustainable development practices to mitigate its environmental impact and remain economically viable.

Favorable Government Policies

Acknowledging the significance of the real estate sector, the government has introduced various initiatives and subsidies to promote eco-friendly construction in the residential domain. Key programs include the Green Rating for Integrated Habitat Assessment (GRIHA) and Leadership in Energy and Environmental Design (LEED) certifications. Developers of sustainable buildings can benefit from low-interest loans offered by the Indian Renewable Energy Development Agency (IREDA), enhanced floor area ratio (FAR), and tax incentives. Additionally, green buildings receive faster approvals and inspections, further encouraging the adoption of sustainable practices.

The Indian government has enacted measures to promote green infrastructure, such as tax incentives for renewable energy projects and the Pradhan Mantri Awas Yojana (PMAY), an initiative promoting sustainable materials in affordable housing construction. On the other hand, government initiatives like the Smart Cities Mission and affordable housing initiatives have significantly advanced this sustainable transition. Policies like the Energy Conservation Building Code (ECBC) and modifications to Real Estate Regulation and Development Act support transparency and sustainability; green technologies and long-term strategies have now become integral components of real estate development processes.

Commendable Role by Stakeholders

Following recent initiatives, consumers and investors alike are increasingly adopting sustainable real estate practices in India. Over the last decade, Indian real estate has achieved great strides toward international environmental standards; developers and architects have adopted green building practices such as reducing carbon emissions, conserving water, and creating energy-efficient spaces. By 2024, India had established itself as an international leader in green building, with over 11,000 projects certified under green standards covering over 10 billion square feet of total area.

Moving forward on the sustainability path, over 248 buildings spanning 7.23 million square meters have received Leadership in Energy and Environmental Design (LEED) certification, putting energy efficiency and water conservation first when selecting materials to construct them. Newer developments often incorporate features like solar panels, rainwater harvesting systems, and advanced HVAC systems, while renovations aim to retrofit older structures to meet sustainability standards. These measures collectively lower India's carbon footprint while meeting global sustainability goals for real estate development in India.

Long-run Benefits

Though green technologies may have higher initial costs, the long-term economic benefits of sustainable development cannot be underestimated. Green buildings consume up to 30% less energy and 50% less water, significantly cutting operational expenses while increasing tenant and investor appeal. Green-certified properties often command a 12-14% premium over non-certified properties, underscored by sustainability's economic advantages.

Sustainable real estate practices not only provide economic advantages; they also enhance residents' quality of life. Green buildings provide improved indoor air quality, natural lighting, and reduced urban heat island effect, creating healthier living spaces that meet the demands of an increasing number of home-based workspaces and sustainable indoor environments that meet their needs.

The Bottom Line

India's real estate sector stands poised to make significant strides toward sustainability thanks to innovative solutions, government support, and market demand for higher-quality products. The credit for this success also goes to collaboration among developers, policymakers, and investors. As urbanization accelerates, this collaboration will become even more essential in balancing economic growth with environmental stewardship; green technologies, energy-efficient buildings, and sustainable urban planning. Now, India is potentially setting an inspirational example for sustainable urban development worldwide.