London, United Kingdom, December 16, 2018 --(PR.com)-- The leaseback
system in France has been incredibly popular with overseas-based buyers, especially Irish and British investors.
From the buyer's perspective, a sale leaseback
can be an attractive investment in the real estate category as it requires less maintenance and administration than many multi-tenant real estate investments.
Sale and leaseback
has been thrust into the spotlight of both a business and public audience as some commentators seek to blame it for the current woes of the company.
Banks will lend around 70% of the vacant possession value whilst a sale and leaseback
structure can realise 100% of the investment value, hence releasing what could be double the amount of cash into the business.
Recent examples Recent examples of sale and leasebacks
cover all types of operators and properties.
The most significant effect of section 467 arises for disqualified leasebacks
and long-term agreements.
If the rental agreement is a disqualified leaseback
or long-term agreement that has increasing or decreasing rents, a principal purpose of which is tax avoidance, the fixed rent for each rental period is redefined as the constant rental amount.
The seller was a family office that structured an initial sale leaseback
of the properties with the tenant.
Therefore, while the proposed IAS17 will decrease the incidence of its use, the sale and leaseback
remains an important option for the corporate owner-occupier, especially in a climate where the availability of credit from lenders remains constrained more than two years after the banking crises.
Increasingly, organisations across the North-East are using sale and leaseback
arrangements to help them achieve other commercial objectives and are viewing it as a method of deriving better returns from their property portfolios.
93-8, Accounting for the Sale and Leaseback
of an Asset That Is Leased to Another Party, addresses the accounting by a seller-lessee for a sale-leaseback of personal property when
As corporate sale leasebacks
are now considered a legitimate source of capital, they are being considered with the same weight as any other source of equity or debt.