Answers · Is a sale & leaseback worth it?
Is a sale and leaseback a good idea?
Direct answer
A sale and leaseback is a good idea when the capital tied up in your premises would earn more reinvested in your business than it earns sitting in property. You release close to 100% of the building's value, keep operating from the same site, and swap property risk for a long-term lease. It suits most growing owner-occupiers; it suits some less.
The case for it is straightforward. You unlock the full value of an otherwise illiquid asset without moving or disrupting the business, you take property risk off your balance sheet, and — with the right long-term owner — you keep secure tenure, fair reviews and a partner who reinvests in the building. For a growing business, the freed capital almost always earns more in the operation than it did as bricks and mortar.
The considerations are equally honest: you give up future capital growth on the property, and you commit to a lease, so the terms (length, reviews, responsibilities) matter and should be agreed up front. It makes most sense for owner-occupiers who would rather have their capital working in the business; it makes less sense if property is a deliberate part of your wealth strategy and you accept the lower return. This is general information, not advice — weigh it for your own situation.
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