_Case Study: Sale and Leaseback

There were a variety of alternatives for the client and the task was to find a strategy that would protect the future viability of the business, while also maximising market value. A higher rent may have resulted in a bigger sale price but would have put the business under a lot of pressure in the future.

Paying careful consideration to the local markets in which the assets sat, we used our regional network to ensure the correct rental level was set. Our recommendation was an index-linked review structure to leverage market appetite for that product, this helped the client structure it in a way that meant their future outgoings were both clearly defined as well as manageable. The next step was to try out some cost forecasting exercises enabling us to accurately foresee any sensitivities in future outgoings.

As a team, we worked closely with the client’s lawyers to draw up a lease that would protect the client’s ongoing occupation of their assets but would also make the investment appealing to a range of buyers. A fully costed program of refurbishment was overseen by the team, this was recommended to the client to undertake before marketing their assets.

Once these steps were completed we produced an in-depth marketing brochure that clearly portrayed the nature and success of the client’s business, as well as the assets themselves. Investors needed to be sure that the covenant they are buying into is capable of meeting their future lease demands.

We used our market knowledge and experience to run a wide-ranging marketing process that included presentations with the client’s executive leadership team and resulted in the portfolio going under offer to a chosen buyer.