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Balancing & Integrating Sustainable Practises with Economic Growth In Real Estate In 2024

The Indian real estate sector is a cornerstone of the nation’s economy, significantly contributing to its growth and development. As India navigates rapid urbanization, there is a growing emphasis on adopting sustainable practices in real estate while still meeting the economic demands of the population. With urban centers expanding and new developments rising, the sector faces the challenge of balancing economic progress with environmental preservation. Achieving this balance is essential for India’s future, particularly as the country aims to meet its ambitious sustainability targets.

The growing awareness of the environmental impact of urbanization is prompting a shift towards real estate projects that not only foster economic growth but also integrate sustainable practices. In a country like India, where the real estate market is booming, this shift is critical to ensure the long-term health of urban landscapes. As India strives toward its 2070 net-zero emissions goal, the adoption of green construction practices is a necessary step in aligning development with environmental sustainability.

Real Estate Trends in India: A Shift Towards Sustainability

India’s real estate sector is undergoing a significant transformation, with sustainability becoming a core focus. As the country aligns with global environmental standards, sustainable real estate is no longer just a trend but a necessity. The Indian government’s initiatives, such as the Smart Cities Mission, affordable housing schemes, and revisions to the Real Estate (Regulation and Development) Act (RERA), have set the stage for more transparent, accountable, and eco-friendly development.

The green building movement in India has seen remarkable growth, with the Indian Green Building Council (IGBC) reporting over 11,053 projects covering a green footprint of more than 10.27 billion square feet by 2024. Moreover, Leadership in Energy and Environmental Design (LEED) certifications are on the rise, with 248 projects across buildings and spaces covering over 7.23 million gross square meters receiving this global sustainability standard. These numbers highlight the increasing adoption of eco-friendly building practices in India.

Snehil Yadav, a luxury real estate influencer says,Urbanization, driven by a burgeoning middle class and investments from domestic and international stakeholders, is expected to push the real estate market to a size of $1 trillion by 2030. As of 2023, the sector contributes 7 percent to India’s GDP, and this figure is projected to rise to 13 percent by 2025. “

The growing demand for residential, commercial, and industrial spaces is fueling the sector’s expansion, but it is also fostering a shift towards sustainability. The integration of smart infrastructure, energy-efficient materials, and renewable energy sources is becoming more common in new projects.

Promoting Sustainable Real Estate Practices

As sustainability becomes more integral to real estate, several organizations are championing the cause. One such example is the World Trade Centers Association (WTCA), which has been a leading advocate for sustainable practices across its network of over 300 businesses in nearly 100 countries. The WTCA’s involvement with the United Nations Global Compact and the United Nations’ 17 Sustainable Development Goals (SDGs) further underscores the organization’s commitment to promoting sustainable growth.

Many World Trade Center (WTC) businesses have embraced green building practices that prioritize energy efficiency, sustainable materials, and the use of renewable energy. Numerous WTC-branded properties worldwide have achieved LEED certification, demonstrating their adherence to globally recognized sustainability standards. These efforts set a benchmark for other real estate developers in India to follow, particularly as the sector works to meet the country’s environmental and economic goals.

Economic Benefits of Sustainable Real Estate

While sustainable real estate development requires a higher initial investment, the long-term economic benefits far outweigh these costs. Green buildings, for instance, can reduce energy consumption by 20-30 percent and water usage by up to 50 percent. These savings translate into lower operational costs, making such properties more attractive to investors and occupants. In fact, green-certified buildings in India command a 12-14 percent premium over non-green buildings, rewarding developers for their upfront investments in sustainability.

Retrofitting existing buildings to improve energy efficiency is also gaining traction in India. An example of this is WTC Rotterdam in the Netherlands, originally built in 1937 and recently renovated to blend its historic architecture with modern sustainable elements. The building now features a green rooftop ecosystem, 340 solar panels, and advanced energy-efficient systems, serving as a model for sustainable development. Such projects demonstrate the viability of combining economic development with sustainability, showing that green practices can extend to both new constructions and older structures.

The “Live-Work-Play” Model: Reducing Carbon Footprints

Another emerging trend in sustainable real estate is the “Live-Work-Play” model, which integrates office spaces, residential units, retail outlets, food and beverage services, and entertainment facilities within a single development. This model reduces the need for long commutes, subsequently lowering carbon footprints while promoting a vibrant, self-sustaining community. The concept has been increasingly adopted in Indian cities like Mumbai, Bengaluru, and Delhi, where urban sprawl and long commute times present significant challenges.

One project that embodies this model is the newly licensed WTC Future City in India. This mini-smart city in Telangana will integrate offices, retail spaces, entertainment zones, luxury hotels, and co-living spaces, all powered entirely by green energy. Such developments not only support sustainability but also improve the quality of life for residents by creating accessible, walkable environments.

Challenges and Opportunities in Balancing Sustainability and Economic Growth

Despite the positive momentum, several challenges remain in the effort to balance sustainability with economic growth in Indian real estate. High upfront costs, a lack of adequate incentives, and fragmented regulatory frameworks often deter developers from adopting green practices on a larger scale. However, recent government initiatives signal a positive shift. For instance, the Indian government’s budget for 2024 includes substantial allocations for green infrastructure and incentives for sustainable practices.

Programs like the Pradhan Mantri Awas Yojana (PMAY), which promotes affordable housing, are also incorporating sustainable building materials and practices. These initiatives not only address the housing needs of India’s growing population but also foster eco-friendly development.

A Harmonious Balance Between Growth and Sustainability

The future of Indian real estate lies in achieving a harmonious balance between economic development and sustainability. As the country works towards its 2070 net-zero emissions goal, the integration of green building practices, smart infrastructure, and renewable energy sources will be essential. Moreover, global networks like the WTCA, along with the participation of policymakers, developers, and investors, will play a critical role in driving this transformation.

Sustainable real estate practices are not only beneficial for the environment but also offer long-term economic advantages. As India’s real estate sector continues to evolve, the integration of these practices will ensure that urban growth is both economically viable and environmentally sustainable. For future generations, this balanced approach will provide a healthier, more resilient urban landscape, where development and sustainability coexist in harmony.

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