More incentives and consistency to spur India’s green real estate growth

INDIA: India’s slow growth in its green real estate could be overcome by consistency, effectiveness in legislation and incentives provided by urban local bodies and developers, said Jones Lang LaSalle (JLL) India Realty.

According to JLL India chief operating officer for integrated facilities management, West Asia, Rajat Malhotra, the incentives are segregated into the urban local body and developer levels.

“At the urban local bodies, efforts are needed for cost-benefit analyses of mainstreaming green initiatives/technologies, and designing incentives that will spur demand for green developments.

“These need to be viewed from the perspective of city-level infrastructure like transport, roads and intelligent technologies, and individual developments such as residential, commercial office, retail and industrial,” Rajat said.

At the developer level, he said there is a need to create platforms for better interaction between entrepreneurs who drive technological innovations and manufacture products that promote green developments, and developers who may consider adopting these technologies.

“These platforms could allow for customised solutions for varying scales of projects, with a view to giving benefits to both stakeholders,” said Rajat.

He attributed the slow growth of India’s green real estate to the scale of policy-level incentives that continue to be a constraint for manufacturers of green technologies, products and equipment as well as developers and consumers of green buildings.

“To be more precise, the incentives being offered are not consistent in all states, and in states where they exist, the implementation mechanism is not aligned to the expected throughput,” Rajat said.

He said additional awareness is needed to enhance consumers’ understanding of the green prerogative and its holistic benefits.

“These awareness drives could be promoted at the resident welfare associations  where interactive platforms can be created with entrepreneurs who are manufacturing green technologies and end users.

“Such drives could result in innovative solutions both at individual household and neighbourhood levels. A proactive outreach to end-consumers with a view to making green real estate more attractive at a macro level is, in fact, a key factor,” Rajat said.

About 60% of future development in India is likely to be residential, hence ensuring green real estate rides on intensive awareness programmes and incentives is crucial.

“Incentives such as tax rebates for buyers of green equipment, property tax breaks for green property owners to offset initial capital expenditure and lucrative financing options for the purchase of green equipment and green real estate should be easily available,” said Rajat.

This article first appeared in The Edge Financial Daily, on March 28, 2014.

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