Bengaluru’s commercial real estate market is facing a growing approval challenge, with developers reporting significant delays between securing statutory clearances and commencing construction. In one recent project, sanction fees were paid in March 2024, but construction could not begin until August 2025 — a delay of nearly 15 months.
Mid-stream rule changes have added to costs and uncertainty, while contractors remained idle even as consultant charges continued to accrue. Much of the bottleneck is linked to Bengaluru’s transition from the Bruhat Bengaluru Mahanagara Palike (BBMP) to the Greater Bengaluru Authority (GBA), an administrative shift that has affected the pace of approvals.
“Much of this traces to Bengaluru’s shift from BBMP to the Greater Bengaluru Authority, a genuinely large administrative transition, and the approvals now routed through it are taking longer to clear,” said Aditya Chellaram, Executive Director, Featherlite Developers. “There’s real reason to expect this to ease as GBA’s systems mature. That hasn’t fully happened yet.”The impact, however, extends beyond the approval stage, with capital getting locked up before construction can begin.
“Building the asset is largely a solved problem for most developers now; that part of the business is operationalised. What actually determines whether a project succeeds or stalls sits earlier, in the approval process. Capital gets committed well before a shovel goes into the ground, land cost, sanction fees, design and consultancy spend, and it sits there earning nothing while approvals move at their own pace,” he said.
approval stage
“The delay is never really contained to the approval stage. It quietly pushes the whole launch calendar and erodes returns before construction has even started,” he added.
According to Santhosh Kumar, Vice Chairman, ANAROCK Group, bottlenecks vary depending on the project and location. “There is no single reason for bottlenecks, but rather a combination of many reasons,” he said, adding that these could include land-use changes, building plans, development permissions and no-objection certificates (NOCs) from multiple agencies. In Bengaluru, building plans and occupancy certificates (OCs), among other approvals, have emerged as key bottlenecks, he said.
The financial impact can compound through land and financing costs, construction-cost escalation and delayed revenue realisation. Financing costs can range between 14 per cent and 19 per cent annually, Kumar said.
The delays come as office demand remains strong. According to ANAROCK Research, Grade A net office absorption rose 2 per cent year-on-year to 27.44 million sq ft in H1 2026, while new office completions fell to 22.15 million sq ft from 24.51 million sq ft. Vacancy across the top seven cities declined to 15 per cent from 16.3 per cent a year earlier. Bengaluru’s vacancy fell to 10.8% from 12.4 per cent .
The issue of approval predictability is also playing out in other markets. In Mumbai, developers describe the challenge less as a broad-based delay and more as uncertainty around timelines.
“In Mumbai, I would describe the issue less as a broad-based delay and more as a question of predictability. Commercial projects typically require multiple planning and building permissions, along with clearances relating to fire, traffic, environment and utilities,” said Amit Jain, Chairman and Managing Director, Arkade Developers.
“The longest timelines tend to arise where approvals are sequential or interdependent, particularly when a proposal requires revisions or additional scrutiny. This can create uncertainty around the overall project timeline,” he said.
Mumbai’s office leasing reached 7.3 million sq ft in H1 2026, up 33 per cent year-on-year, while completions fell 30 per cent to 1.6 million sq ft. Vacancy declined to 15.6 per cent .
Jain said better coordination between authorities and greater use of digital scrutiny could help identify issues earlier. “Approvals need to be planned as part of execution, not treated as a separate stage,” he said.
For Bengaluru, the concern is sharper in the city’s tightest office corridors. Chellaram said the overall vacancy figure masks significant differences between micro-markets. While overall vacancy is around 12 per cent , corridors such as the Outer Ring Road, where global capability centres (GCCs) have strong demand, are running at low single-digit vacancy by some broker estimates.
“New supply in those corridors can’t respond fast enough, land is scarce, approvals take longer than a project can reasonably plan around, and institutional capital is choosier about what it backs,” he said.
“Until land, approvals and capital access ease together, expect rental growth to stay concentrated in the tightest corridors rather than spreading city-wide.”
Published on August 30, 2026
