The Grade-A office stock in India’s 4 mega cities requires upgrade and retrofits to improve its future sustainability that would require an estimated investment of around Rs 23,380 crore, shows an assessment by property brokerage JLL.
The Grade-A office stock in India across the top seven cities stands at 740 million sqft at the end of June 2022. Bengaluru, Mumbai, Delhi NCR and Hyderabad account for 77% of Grade-A office stock in India, amounting to over 569 million sqft.
A substantial 319 million sqft in these four cities have no sustainability/green certification; 43% of this stock is also more than 11 years old, creating a significant capex investment opportunity. Bengaluru has 118.8 million sqft of Grade- A stock that requires upgrade; the same is true for Mumbai’s 85.8 million sqft space, Delhi-NCR’s 80.0 million sqft space and Hyderabad’s 62.8 million sqft office space.
The capex spending needed for green upgrades across these four cities is Rs 2,1400 crore, nearly 92% of the estimated total investment, indicating the road ahead needed for making real estate more sustainable and responsible.
“Given that upgrading to green certifications will form a key part of building future-proofing initiatives, asset owners will need to factor in the costs for such upgrades as well. Bengaluru with its substantial Grade-A stock has a sizeable requirement of Rs 7,590 crore while Mumbai needs Rs 7,010 crore, which adds up to 64.2% of the estimated total investment needed across the top four office markets,” said Samantak Das, chief economist and head of research and REIS, India, JLL.
“In a world envisaged to be net-zero carbon in the future, upgrades are needed for nearly 61% of the total operational Grade A office stock across these cities,” says Aditya Desai, executive-director and head (PDS sales & Investor services), India, JLL.
