Types of Commercial leases in India

Leasing commercial real estate is common in India, but the terms of each lease vary. Here are four types of leases you'll encounter in India's commercial leasing market: Full Repairing and Insuring (FRI), modified gross, net present value (NPV), and zero rent. Which one is best for your business? Read on to find out!

Commercial leases in India

Full Repairing and Insuring (FRI) leases are the most common type of lease in India. Under a FRI lease, the tenant is responsible for repairing and insuring the property. This type of lease is ideal for businesses that want to avoid any unexpected repair costs.

Modified gross leases are similar to FRI leases, but the landlord is responsible for repairs and insurance. This type of lease is ideal for businesses that don't want to be responsible for any unexpected repair costs.

NPV leases are based on the principle that a tenant should pay rent based on the present value of the cash flows it expects to receive from using the property. This type of lease is ideal for businesses that plan to use the property for a short period of time or that expect to receive a lot of revenue from the property.

Zero rent leases are similar to NPV leases, but the tenant doesn't pay any rent. This type of lease is ideal for businesses that plan to use the property for a short period of time or that don't expect to receive any revenue from the property.

Which type of lease is right for your business? That depends on your business's needs and goals. Talk to a commercial leasing agent to learn more about each type of lease and find the one that's best for you.

As the commercial leasing market in India matures, it's becoming increasingly important for businesses to understand the different types of leases available. In this article, we'll discuss four types of leases: full repairing and insuring (FRI), modified gross, net present value (NPV), and zero rent.

There are different types of commercial leases in India. The three most common types are Gross, Net, and Modified Gross. Each type of lease has its own set of benefits and drawbacks for tenants and landlords. It's important to understand the differences between these leases before you sign a contract. Let's take a closer look at each one.

FRI Lease

A FRI lease is a type of commercial lease in which the tenant is responsible for repairing and insuring the property. This type of lease is ideal for businesses that want to avoid any unexpected repair costs. The downside of a FRI lease is that the tenant is responsible for all repairs, even if they are caused by the landlord's negligence.

Modified Gross Lease

A Modified Gross Lease is very similar to a FRI lease, but the landlord is responsible for repairs and insurance. This type of lease is ideal for businesses that don't want to be responsible for any unexpected repair costs. The downside of this lease is that the landlord may not be able to make repairs in a timely manner.

NPV Lease

An NPV lease is a type of lease in which the tenant pays rent based on the present value of the cash flows it expects to receive from using the property. This type of lease is ideal for businesses that plan to use the property for a short period of time or that expect to receive a lot of revenue from the property. The downside of this lease is that it can be difficult to estimate future cash flows accurately.

Zero Rent Lease

A Zero Rent Lease is very similar to an NPV lease, but the tenant doesn't pay any rent. This type of lease is ideal for businesses that plan to use the property for a short period of time or that don't expect to receive any revenue from the property. The downside of this lease is that the tenant is responsible for all repairs, even if they are caused by the landlord's negligence.

 

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