Residential buyers willing to pay 5-10% more for green buildings, Corporates open to 15%+ premium: reveals Xynteo
New Delhi, 19th March 2024: New-age consumers are steadily becoming conscious about their environmental impact and willing to participate in the creation of sustainable ecosystems, not shying away from certain premium costs. The latest report by Xynteo’s Build Ahead, a business-led initiative focused on scaling decarbonizing efforts in India, has uncovered a significant appetite for green residential and office spaces among Indian consumers, countering a prevalent notion that the market is not ready for sustainable construction.
The study surveyed over 1100+ residents across Ahmedabad, Bhubaneswar, Delhi, Noida, Gurugram, Hyderabad and Mumbai. Most consumers are willing to pay 5-10% premiums for green-certified homes, with Mumbai residents exhibiting over 70% greater likelihood of selecting these homes over other cities. However, despite good sustainability engagement, 88% of the respondents have no knowledge about green buildings. This indicates a need for the real estate sector to do more to raise awareness about the benefits and availability of green buildings.
Among corporate occupiers, over 85% already lease green office spaces, motivated by energy savings and sustainability targets. 74% indicate a willingness to accept higher premiums for lower emissions buildings, from premiums of 15% for near-zero emissions to 50% for net zero. Energy efficiency and renewable energy emerge as the top motivators. However, gaps exist between sustainability goals set at the board level and integration into real estate decisions. Clear internal communication and alignment of priorities is needed.
The survey clearly depicts that customer engagement is high when it comes to sustainability but the demand is hampered by misconceptions around green building costs, availability and benefits. Real estate developers should invest more in sustainability features and credentials coupled with effectively communicating associated benefits like energy savings. Companies can ensure green building targets are integrated into real estate decision-making.
Vipul Kumar, Senior Partner, Xynteo said, “The survey results debunk the perception that Indian consumers demand for sustainable living is negligible or nascent. Today consumers care about access to greenery, clean air, reliable materials, and operational savings, which green buildings can offer. This is the perfect time for real estate/construction companies to seize the moment and offer green alternatives. Real estate is one of the largest contributors to total global emissions generated by manufacturing (steel and cement) and the rest is contributed by the energy used to power the buildings. There is a clear need to adopt green practices while building homes and offices; now strongly backed by consumer demands.”
Build Ahead comprises some of India’s largest and most influential organizations across the cement and glass value chains, including: Godrej Construction, Ultratech Cement, Saint Gobain, JSW, JLL, Lodha, and SED Fund.
The full report can be accessed here Survey Report
About Xynteo
Xynteo is a purpose-driven strategic advisory firm that helps global organizations, and their leaders, find new ways to grow forward as they tackle the societal and environmental challenges that are too big, too expensive, and too complex to solve alone. We believe that business is a force for good when leaders think long-term, work with, not against nature, and use their influence and resources for the many, not the few. For us, this is good growth. Our partnerships and communities include Build Ahead, Energy Leap, Europe Delivers, Leadership Vanguard, Vikaasa and Xynteo Exchange.
For more information, please contact Shaiyra Devi, Principal, Xynteo at shd@xynteo.com
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