Transact: Acquiring land or leasing a built space in India?

Comparative timeline of transaction processes

Comparing the timelines involved in the four transactions

For a manufacturer, acquiring land and constructing the unit is usually a lengthier process than opting for built spaces. Evaluating the best option between the two is, therefore, crucial in project lifecycle calculation, especially for light manufacturing that can be easily accommodated in built spaces.

Some key concerns are mitigated when a manufacturer opts for built spaces.

• Compressed timeline and faster commencement of operations: From leasing to plant commissioning, it takes 12-14 months if a manufacturer opts for built-to-suit facility and 6-8 months in the case of a ready-built unit. Leasing land and constructing a site takes longer – around 17-21 months. Manufacturers can, thus, save CAPEX and OPEX if they opt for built spaces.


• The ready-built spaces are asset-light and conform to client specifications.


• Built spaces are typically located within large industrial parks and benefit from the landlord taking care of the facility management that optimises OPEX.

Light manufacturing clients have an affinity for ready-built and build-to-suit options, as they help to increase efficient business planning and strategies.

Current Market Trends in Built Spaces

A deeper dive unveils sectors that have caught on to the trend in the past 18 months.

^{Source: JLL Research}

^{*Note: Top 8 Indian cities taken for Transaction details}

Major sectors like electronics and electrical manufacturing (28%), automotive (15%), chemicals and plastics ancillaries (14%) and building materials (13%) have the potential for mid-sized light manufacturing units (especially ancillary and component manufacturing – segments of upstream integration). They have been early catchers of the trend as they can be accommodated within built spaces.

Another emerging sector, the manufacturing of “renewables” (including solar PV, windmill component, etc.), included in the green technologies sector, has redefined the spatial requirements of manufacturing facilities. These spaces demand a different set of requirements. In wind-energy equipment manufacturing, for example, over 65-70% of land accounts for open space for storage of over-dimensional and overweight cargo. 

*The built space transactions for light manufacturing in India amounted to ~11.5 million sq. ft. in the past 18 months.

*Similar market dynamics is expected to continue in H2 2021, resulting in built space transactions to reach around 18 million sq. ft. within two years (by 2021-end )