Publications

- November 1, 2020: Vol. 12, Number 10

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Unlocking value: Sale-leaseback transactions benefit both corporates and investors

by Adrian Harrington

In a COVID-19 world, coupled with a low interest-rate environment, corporates are revisiting their real estate occupancy strategies to unlock value. For companies that own and occupy their real estate assets, a sale-leaseback transaction can be an astute business strategy. At the same time, sale-leasebacks can provide an attractive investment opportunity for real estate investors.

Sale-leaseback activity is not new but is certainly on the rise, according to JLL. Between 2015 and 2019, sale-leaseback deals in the Asia Pacific region grew 48 percent, while overall transaction volumes increased by 19 percent over the same period. JLL expects more companies to consider sale-leaseback transactions, given the economic uncertainty created by COVID-19.

Company ability to monetise an asset

Given the strong demand from both listed REITs and unlisted funds for long-term leased real estate assets, together with the historically low cap rates at which these

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