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Green Buildings Make Real Estate Business Sense

India is witnessing a tremendous growth in infrastructural development. The construction industry reflects one of the largest economic activities of the country. As the sector is growing rapidly, preserving the environment poses many challenges and at the same time presents wonderful opportunities for various stakeholders.

The demand for energy, water and materials for construction has been growing enormously over the years and the need has arisen to address the minimization of natural resources for the building construction and their associated impact on environment. Building sector accounts for 30-40 percent of global Green House Gas emissions.

The construction sector therefore needs to play a responsible role towards preservation of the fragile environment. In this regard, green buildings can play a catalytic role in addressing environmental issues and concerns.

The major benefits of green buildings include energy savings to the tune of 40-50 percent and water savings of about 20-30 percent, intangible benefits which includes: enhanced ventilation, better views and day lighting that significantly improve the productivity of the occupants, green corporate image and it also demonstrates the company’s commitment to environmental protection

Green Buildings movement in India, with the support of all stakeholders is being spearheaded forward by the Indian Green Building Council (IGBC) of the Confederation of Indian Industry (CII). The council is represented by stakeholders across the board of the Indian construction industry comprising of the government, corporate, nodal agencies, architects, designers, institutions, builders & developers, product manufacturers, suppliers, facility managers among other sector players.

IGBC, with support from all stakeholders works with the government of Maharashtra in developing ‘environment guidelines’ for Area Development Projects in the state. With a modest beginning of 20,000 sq ft in the year 2003, green built-up area in the country, today (as on July 2012), 1,707 green buildings projects with a built- up area of over 1.20 billion sq. ft are registered with the IGBC, out of which 267 green building projects are certified and fully functional in India. These include offices, factories, hospitals, hotels, it parks, airports, banks, residential spaces, SEZ’s, townships among others.

Mumbai itself has about 250 buildings registered with IGBC, which are at various stages of construction. Mumbai ranks second in the country with 36 rated operational green buildings.

One of the biggest reasons why green buildings are now widely accepted by the cross-section of the society is the fact that green buildings make good business sense and are financially very attractive. The construction costs of a green building would be 5-8 percent higher for a Platinum building than a conventional building, the incremental cost gets paid back within 3-4 years with substantial reduction in operational costs.

For instance, the declining initial incremental cost over years of Kalpataru Square in Andheri East locality of Mumbai, which was Platinum-certified in 2008, measuring 3, 27, 000 sq ft has been 2 percent. Few of the green buildings which have been in operation for 5 years have been monitored for operational savings.

Kohinoor Hospital in Kurla with a built up area of 21,137 sq ft has seen a reduction of 40 percent. By 2012, IGBC expects the number of green building projects registered in India to reach 2,000. This in turn will catalyze more business opportunities. It is estimated that the market potential in India for green building products and technologies would be about US$120 Billion by 2015.

S Raghupathy, Executive Director, CII Sohrabji Godrej Green Business Centre, Hyderabad

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