India’s urban landscape is undergoing a significant transformation, where the convergence of technology and sustainability is shaping the cities of tomorrow. As the country moves towards more eco-conscious urban development, the focus is on smart cities that integrate modern infrastructure with environmentally friendly practices. These changes are driven not only by government initiatives like the Smart City Mission but also by a shift in consumer and investor preferences towards sustainable, future-ready solutions.
Mr. Harish Fabiani, Chairman of IndiaLand Properties, brings a wealth of experience from his work in real estate development and private equity. His career has been marked by a focus on balancing commercial growth with environmental responsibility, particularly in India’s rapidly expanding urban centers. In this article, Mr. Fabiani delves into the role of smart cities and sustainable construction in India’s urban future, exploring how these initiatives are setting the stage for both economic prosperity and environmental stewardship.
Read on as Mr. Fabiani offers his perspective on how these changes are redefining urban development and paving the way for a sustainable future.
Smart Cities & Sustainable Construction: The Future of Urban Development in India
India is rapidly accelerating toward sustainability in various sectors, and real estate is one of them. Smart cities have started adopting innovative features into their projects to make their buildings more reliable and attractive. Integrating these sustainable technologies offers various opportunities for urban development. And, to promote sustainable construction, the government has also launched the Smart City Mission. It promises to offer core infrastructure with feasible technologies that will lead to a decent life for the citizens. According to the data provided by the government, they have completed 93% of the total projects under this initiative, while 7% of the projects are still ongoing. 31% of the total Indian population lives in urban areas, contributing 63% of the total GDP. By offering sustainable construction in those areas, the government aims to increase the number by 40%, which will further account for 75% of India’s GDP by FY2030. Indian data forecast the construction sector to surge at a CAGR of 9.6% and touch INR 36.58 trillion by 2028, reflecting a high growth potential. Most of the residents look for a building that provides them with smart solutions, even if it’s at a premium price. By integrating this into daily lifestyle, we are promoting more environmentally friendly practices and green buildings for a better future.
Cities Featuring Smart Urban Transition
In the past few years, Pune has witnessed significant growth in the real estate sector, especially after the integration of smart technologies. It has worked as a magnet to attract many investors and residents, directly increasing the valuation of the properties. Pune is considered the “Oxford of the East” due to its exceptional educational and IT hub, and recently, the city has gained a green building momentum supported by the government policies and the shift of the residents into sustainable living with easy-to-use technology. This smart city is popular for its IT parks that fulfill the requirements of the various tech companies by providing them with advanced security systems, high-speed internet connections, sustainable transportation systems, and many more that cater to their demand and enhance their livelihood. For instance, the Global Tech Park in Pune, which is spread over 28 acres of land, provides smart amenities and easy access to smart technologies, making it an attractive location for investors to invest.
Meanwhile, this initiative has also impacted commercial real estate in a positive way by making significant developments in various areas. Many MNCs and companies with strong CSR agendas are now seeking offices that are future-ready and support sustainable practices. This demand is driving many participants to invest in a destination that is perfect for office spaces and retail outlets, contributing to the economic growth of the region. A recent report states that the Indian office sector achieved a gross leasing volume of 89 million sq ft last year. I've been in this business for a long time, and after analyzing the trend closely, I believe that integrating these smart practices in the projects could enhance the urban infrastructure, which will directly benefit commercial and retail space demand.
In the Smart City Mission, where different organizations from France, Germany, Singapore, Japan, and many more showed interest in joining, Coimbatore emerged as one of the selected cities for projects focusing on water management, energy conservation, clean water supply, smart infrastructure development, and a smart & secure surveillance system. Under this project, the government has aimed to implement 39 smart projects in the city, out of which 24 projects have been completed, 11 are ongoing projects, and there are 4 new upcoming projects. These projects comprise smart housing for everyone, an AQI monitoring system, digitization of property for tax assessment, street art, solar power plants, underground drainage schemes, solar trees with smart branches, solid waste management, multilevel car parking, and many more. Through these initiatives, Indian urban development will grow at a high pace, particularly due to the Coimbatore Smart Infrastructure Project.
Green Buildings Taking the Center Stage
Over the last 4-5 years, we have seen an emerging trend in the Indian real estate sector, particularly in the smart cities - Green Buildings. These buildings provide the best sustainable amenities and smart technologies. According to the USGBC global list of green building certifications, India stood in third position and was recognized as a net-zero building leader in 2023. According to the data, between 2023 and 2028, the green building market in India is expected to grow at a CAGR of over 5%. We believe that smart cities will play a key role in promoting this sustainable real estate trend in our nation. Changes in consumers' mindset towards sustainability, tax benefits provided by the government easing the financial burden, and personal state-level incentives are other main reasons behind this robust growth, benefiting both the residents and developers. We think that to increase the adoption of green buildings private sector should collaborate with the government bodies. Such collaborations would give an advantage to the citizens and increase well-built structures across our smart cities and beyond metros. By integrating green buildings in the Smart City projects, developers can also save on operational costs and increase the valuation of their property.
Currently, many citizens are shifting towards sustainable solutions due to environmental concerns, and integrating these solutions in construction will push the real estate sector to the top. However, we believe that policies and schemes offered by the government, like PM Surya Ghar Muft Bijli Yojana, which promises to install solar plants on the rooftops of nearly 1 crore houses, will promote sustainable construction in the smart cities. Besides these, with several industrial parks, corridors, and roadway projects on the cards, the developers have an opportunity to initiate large-scale sustainability measures.
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