Sale-and-leaseback as a British Real Estate Model

Purpose – Many established trading companies have had considerable capital value locked into their operational properties. These properties have been identified as producing lower returns on invested capital than core business activities. Consequently, there has been a growing trend for the splitting of operational property from core business activity. This paper seeks to identify trends in sale‐and‐leaseback, which is the most common model in the UK.Design/methodology/approach – This paper reviews, the existing literature and some past transactions in order to identify the motivations of both operational businesses and property investors in adopting the model. Some transaction case studies are also highlighted.Findings – Identification of the motives behind this approach. Accounting, taxation and capital release are identified as the main drivers when the model first became widespread in the UK two decades ago. It is now driven by taxation and capital release. Originally adopted by leading companies, sal...