When BTS beats standing stock, how 9-15 year deals price, making the spec schedule enforceable with acceptance tests, and verifying the land under your building.
Standing Grade-A stock fits most distribution operations. Build-to-suit earns its premium when the operation is genuinely non-standard: extra height for ASRS automation, heavy floor loads, wide column grids, temperature-controlled chambers, hazardous-goods compartmentation, rail or private-siding access, or simply scale in a corridor with no standing supply. The trade is explicit: a developer commits capex to your specification in exchange for term and lock-in that amortise it.
The decision discipline is to price BTS against the nearest standing alternative including its compromises, and to be honest about which spec items are operational necessities versus preferences that standing stock could serve.
BTS rents build from land value, construction cost and the developer's yield expectation, escalating like any lease but over longer terms, commonly 9 to 15 years with lock-ins covering the developer's payback. Negotiate the open-book elements: the construction cost basis, the yield applied, and what happens to the rent if your spec changes mid-design. Define ownership of tenant-specific improvements at expiry, and your renewal and purchase options while leverage is highest, before signature.
Watch the reinstatement asymmetry: a highly customised building the developer cannot re-let easily will push for either longer lock-in or restoration obligations; both are negotiable when named early.
The schedule of specifications is where BTS deals succeed or sour. Every performance line, clear height under obstruction, floor flatness class and point loads, dock count and leveller ratings, sprinkler design density and commodity class, power capacity and redundancy, lux levels, ventilation air changes, should carry a measurable acceptance test and a remedy. Handover should be gated on test certificates, fire NOC for your commodity class, and the completion certificate against the sanctioned plan, not on a walkthrough and goodwill.
Stage-gate the build with milestone inspections, pad, steel, floor pours, services, because floor flatness and drainage faults are nearly uncorrectable after the fact.
A BTS occupier carries the park's land risk for a decade or more: title and encumbrance on the parcels under and around your building, conversion and zoning for warehousing use, the sanctioned master plan including the roads your trailers will use, and the developer's own financing, whose default could put a lender between you and your building. All are verifiable before signature, none are economically fixable after.
We run the full 30-point verification on the underlying land and the developer's approval stack as a standard precondition in BTS mandates.
A facility a developer constructs to your specification on their land, leased to you over a longer term, typically 9-15 years, whose rent amortises their capex. You get exact fit; they get committed tenure.
For standard PEB construction, around 6 to 9 months from groundbreak for the building itself, plus design, approvals and site works ahead of it. Approval-ready land in an established park shortens the front end materially.
An enforceable specification schedule with acceptance tests, open-book cost and yield basis, milestone inspections, handover gated on certificates, renewal and purchase options, and verified title and approvals on the underlying land.