Sustainable development aims at minimising waste and reducing exploitation of natural resources and energy, so that needs of the future generations are taken care of. Circular Economy (CE) is a new drift towards sustainability that aims at minimising waste and promoting material reuse, thereby creating a regenerative system. The construction industry is responsible for the extraction of raw materials and the generation of waste in large quantities, thereby making it an opportune sector for transition to a circular economy. On account of the complex nature of the built environment comprising various phases and associated actors, a proper framework or indexing for the circular economy is missing at present. This study aims to develop an integrated model of CE in the built environment which considers various construction stages and applicable strategies. An index for measuring the circularity potential in construction materials is also proposed, based on attributes developed from literature review and analysis of questionnaire survey. Simple Additive Weighting Method (SAWM), an elementary multi-criteria decision-making method is used for developing the index. It is anticipated that Circular Economy Potential Index (CEPI) would support decision-making in the initial stage of construction projects and help to compare the circularity of materials.