The ground lease model is rapidly emerging as a capital-efficient investment tool in India’s industrial real estate sector, providing a strategic framework that aligns long-term land monetization with flexible development. By separating land ownership from property development, this model allows investors and developers to lease land over a defined tenure, typically 30 to 99 years, while directing their capital into constructing and operating built-to-suit (BTS) or ready-to-use industrial facilities. This not only reduces upfront investment costs but also enhances the overall return on capital employed, particularly in high-value corridors.
For investors, ground leases offer predictable, inflation-adjusted rental income with low maintenance obligations and long-term asset security. Unlike outright purchases, ground leases reduce capital lock-in and allow greater liquidity and portfolio diversification. They are particularly appealing in prime industrial zones—such as those along the Delhi-Mumbai Industrial Corridor (DMIC), Chennai-Bengaluru Industrial Corridor (CBIC), and Gujarat’s Dholera SIR—where land acquisition costs are high and infrastructure development is accelerating. By leasing rather than buying, investors can gain strategic location advantages without the burden of land ownership.
Simultaneously, landowners benefit by retaining long-term control over their assets while generating consistent cash flows, often with built-in escalations. Government agencies and private landholders are increasingly favoring this model to attract investment without sacrificing land ownership, particularly in state-supported industrial parks and logistics clusters. As industrial demand intensifies and capital deployment strategies become more sophisticated, the ground lease model is gaining prominence as a risk-mitigated, yield-focused structure, e—reshaping how land is monetized and infrastructure is financed across India’s rapidly evolving industrial landscape.
