2021 will see stars align for sale and leaseback transactions: experts

Sale and leaseback transactions (S&LB) in Europe reached a total of €8.4 billion in 2020, 8.5 percent higher than the five-year average, with the trend set to continue into 2021 according to Savills. Also in Poland, Savills sees an increasing number of companies willing to take the sale and leaseback route mainly in the industrial and retail sectors.

Data from the international real estate advisor shows that although the 2020 volume was 10 percent lower than 2019, historically there has been a significant correlation between property prices and S&LB activity, which translates into an increasing number of S&LB transactions when yields are moving in. This current period is indeed an ideal time for S&LB transactions to take place as rising prices trigger owner-occupiers’ interest in selling their properties, whilst investment opportunities are scarce on the market.

“The increased need for businesses to find liquidity to shore up balance sheets or make acquisitions in the current and post-Covid environment will help S&LB transactions to become increasingly popular during 2021. Our view is that H2 2021 will see a record number of corporate-led S&LB deals. These sales will be welcomed by the increasing wall of capital which will be hunting long income assets as they try to match liabilities,” Oli Fraser Looen, Joint Head of Regional Investment Advisory, EMEA, Savills, commented.

(WBJ)