In the recent times, finding a quality workspace, equipped with all sorts of amenities and located at a prime location of a top metro city isn’t as easy as it used to be. These days, a shortage of supply for premium office spaces can be seen in the bustling cities like Delhi NCR, Mumbai, and Bangalore. So, what are companies doing? They’re flipping the script and building their dream offices from scratch. Companies are now increasingly turning to built-to-suit (BTS) developments to secure the work environments they truly need. Now, what are built-to-suit developments?
Well, in this approach, companies generally take an under-construction property on lease and build it as per their needs and brand reputation. This trend isn’t just a passing phase—it is rapidly becoming a strategic move for those looking to future-proof their operations, enhance flexibility, and create workplace environments that align with their brand and culture. As the demand for Grade A office spaces outpaces supply year after year, BTS is emerging as a smart solution.
Why the Sudden Shift to Built-to-Suit Offices?
The root of this emerging trend is a significant demand-supply imbalance. Currently, India faces an annual shortfall of approximately 20 million square feet of Grade A office spaces. This mismatch has been further amplified in the recent years due to a slowdown in construction activity across key business districts. Some submarkets haven’t added any fresh supply in two years, resulting in vacancy rates falling to record lows of around 5% in prime locations like Gurugram CBD, Mumbai BKC, Bengaluru ORR, and Hyderabad Madhapur.
This scarcity has led companies to act fast. Over 100 large leasing deals (100,000+ sq ft) are currently under negotiation, with more than 50 signed in the first quarter of 2025 alone. Businesses are now left with two choices: either shift operations to non-core locations or secure space in buildings that are still under construction.
That’s why built-to-suit offices are becoming the preferred choice for companies looking to create a space that reflects their identity, culture, and work style. For many, especially global capability centers (GCCs) and multinational firms, having a workspace that mirrors their global standards is non-negotiable. Custom-built campuses help them align design with functionality while also allowing for future expansion.
Generally, BTS requirements range from 500,000 to 1 million square feet. These are massive, single-tenant buildings designed for long-term use, giving businesses full control over design, layout, tech infrastructure, and sustainability elements.
Interestingly, real estate developers are responding well to this rising demand. Business districts near major airports, such as Aerocity in Delhi, are becoming prime locations for such developments. These areas offer easy access, a concentration of business activity, and the ability to build integrated, smart business campuses.
Developers across the major cities are offering modular, scalable, and sustainable office solutions, complete with green certifications, tech-enabled infrastructure, and flexible layouts. Some are even launching entire towers designed specifically for BTS tenants, with leasing models that give companies greater autonomy during the construction phase.
The market is moving fast. In Q1 2025, over 50 large BTS lease deals (each over 100,000 sq ft) were signed, and more than 100 are currently under negotiation. Companies that can’t find ready space in core locations are pre-leasing buildings still under development to ensure they don’t miss out.
This urgency is further driven by the fact that 35% of new buildings delivered in the last three years are already fully occupied, and another 14% are close to full. In some cases, even under-construction buildings are nearing complete lease-out months before completion.
What Tenants Are Looking For
The post-pandemic era has changed how companies view their workspaces. Modern tenants are seeking:
· Flexibility: Spaces that can adapt to changing work styles.
· Sustainability: Green buildings that reduce environmental impact and energy costs.
· Well-being: Amenities that support employee health and productivity.
· Tech readiness: Smart infrastructure that supports hybrid work and digital collaboration.
Built-to-suit spaces check all these boxes. From open-plan collaborative zones to private areas for focused work, the design possibilities are endless. Plus, with developers offering personalised build-outs on long-term leases, businesses have more control over their future workplace.
What Lies in the Future?
India’s office market finished 2024 on a high note, with 89 million square feet of gross leasing volume across major cities. However, just 45 million square feet of new Grade A supply reached the market, reducing vacancy rates and increasing the need for new inventory.
Built-to-suit is now seen as a strategic solution—not just a workaround—for companies looking to grow, innovate, and retain talent. And with GCCs accounting for nearly 30% of office demand, the future is clearly leaning toward high-performance, tailor-made campuses.
As the market heads deeper into 2025, supply is expected to bounce back, especially in suburban areas. But the preference for personalized, efficient, and future-ready spaces will likely keep built-to-suit firmly in the spotlight.
In a space-starved office market, companies aren’t just chasing square footage anymore—they’re investing in environments that truly work for them. And that’s why custom-made is becoming the new standard.
