14:34 6 September 2023
Leaseback most attractive financing option - INWI
Entrepreneurs are exploring financing options, with sale-leaseback of properties emerging as an appealing choice due to its ability to secure substantial capital quickly. This method involves a company entering a property purchase-sale agreement while also leasing it, said Daniel Radkiewicz, CEO of real estate investment firm INWI. Notably, there is no interest rate associated with sale-leaseback; it differs from loans or leasing, as there is no obligation to repay capital. Instead, it involves a predictable monthly rent, similar to loan interest. This stability contrasts with loans, which often have variable interest rates vulnerable to inflation.
Sale-leaseback agreements can span up to 20 years, providing companies with stable financing and enabling them to focus on core operations without interest rate risks. Investment funds typically require a minimum investment threshold, often around €10 million, but there is no upper limit, and transactions exceeding €200 million are common. The building's purpose, particularly those crucial to a company's operations, is a key consideration. Investment funds offering sale-leaseback seek a minimum 15-year time horizon with extension options, providing companies with unprecedented financial security.
Source: WBJ
