A structured sale and leaseback transaction provides a firm with a number of benefits. It can structure the sale and leaseback as an off-balance sheet transaction, and as such benefit from the tax savings. Sale and leaseback is also a way of maintaining continuity of the firm’s business location while providing an equity release, which enables further investment in the business or a reduction in gearing.
From a financial structuring basis, it can enable the firm’s financial director to fix its rental commitments over the period of the occupation lease by the inclusion of fixed rental uplifts instead of the ‘normal’ five yearly, upward-only open market rent reviews.
