"How much can I actually get?" is the first question most owners ask, and it's the right one. The honest headline answer is: potentially the full market value of the property. But the figure that lands in your account depends on what you own, how the lease is structured, and what's already secured against the asset. Here's how to think it through before you go anywhere near the market.
The theoretical ceiling
In a sale and leaseback, you're selling the property at market value. There's no lender's LVR to limit you and no maximum advance to work within. The gross proceeds are the market value of the asset — and if that asset is unencumbered, the net proceeds to the business are essentially all of it.
Compare that to refinancing, where the capital you can access is capped by how much a lender will advance against the property's value. The gap between the two can be very large, and for an owner who has held a property for years it's often the difference between releasing a useful slice and releasing the whole asset.
What determines market value for an industrial asset
For a single-tenant industrial property in South-East Queensland, market value is driven by a small number of factors. Location and land content matter a great deal — proximity to motorways, ports and labour catchments all affect what a buyer will pay, as does the underlying land value beneath the building. The age, condition and functional suitability of the improvements matter too, particularly whether the building was purpose-built for your operation or is a general-purpose shed that suits a wide range of tenants.
The lease itself is also a major value driver, and this is the part owners most often underestimate. A long lease to a creditworthy tenant is worth considerably more to an investor than a short one. The structure of rent reviews, the strength of the covenant and any renewal options all shape the quality of the income stream — and the quality of the income is what a buyer is really pricing.
The rent you agree to moves the number too
There's a lever owners often miss: the rent set on the leaseback directly shapes the price. Because an investor is buying an income stream, a higher rent supports a higher sale price, and a lower rent a lower one. In theory you could lift the rent to maximise the cash released on day one.
But that's a trap worth naming. Rent set above the genuine market level inflates the headline proceeds while saddling the business with an above-market cost for the entire lease term — and it tends to come home to roost at the first review, when the passing rent is measured against what comparable buildings actually command. The sustainable figure is a fair market rent, which produces a fair price and a building the business can afford to occupy for the long haul. Maximising the day-one cheque and maximising the long-term outcome are not the same thing, and it's the second one that counts.
Existing debt reduces the net proceeds
If there's a mortgage or other security over the property, that debt has to be repaid from the sale proceeds at settlement. The net capital released to the business is the sale price less whatever is owed — gross value out, debt cleared, the balance to you.
For many owners who have steadily paid down their mortgage over the years, that net figure is still very significant. For those carrying higher leverage, it's worth modelling carefully rather than assuming a particular outcome — the gap between gross and net can be larger than expected, and it's better to know that before you start a process than to discover it at settlement. Your accountant should also factor in transaction costs and the tax treatment of the sale, which further separate the gross price from what actually lands in the business.
Not every property is equally attractive to investors
A purpose-built facility in a well-connected industrial precinct, leased on a long term to a business of genuine substance, is a highly sought-after asset. A buyer will pay a full price for that kind of secure, durable income.
A more generic building, a shorter residual lease, or a secondary location will attract a higher yield — meaning a lower price for the same rent. That's not a reason to avoid a transaction; it's a reason to understand exactly what you have and to structure it as well as possible before going to market. Often the lease can be reshaped to improve the outcome before any sale is contemplated, which is why the structuring conversation should come first.
Get an independent read before you commit
Before you approach an investor or an agent, an independent valuation is well worth commissioning. It gives you a realistic anchor for negotiations and helps you decide whether a sale and leaseback makes sense at all. Your legal and financial advisers should be across the specifics too — the tax treatment of the proceeds in particular can significantly change the net outcome, and that's a take-your-own-advice matter, not something to estimate from a blog.
The bottom line is that a sale and leaseback can unlock far more than most owners assume — potentially the full value of the asset — but the real number is specific to your property and your debt position. If Walter Taylor's criteria align with what you own, we're happy to have an initial, no-obligation conversation, whether you come to us directly or through your own adviser.