PROPERTY
WORDS : SARAH WALKER PICTURE : CHRIS BOOTH
A ray
Option – John Taylor says a ‘ sale and lease back ’ deal can free up much-needed capital to help a business continue trading .
of light
A
Teesside commercial property and business agent is offering a ray of light to a wide range of businesses during increasingly difficult trading conditions .
John Taylor , commercial director of Parker Barras , says the company has been increasingly busy with “ sale and lease back ” deals , which enable companies to raise capital through the sale of their commercial property .
The company can then lease the property back from the buyer , enabling it to continue trading .
The lease agreement is negotiated to suit the organisational needs of the company and the transaction enables a business to receive 100 per cent of the property ’ s value .
John says the service is in high demand due to financial pressures created by interest rate rises , inflation and unprecedentedly high energy prices .
Describing the current commercial property market as “ a very fluid landscape ”, he explains : “ One of the services we offer that ’ s become increasingly popular is sale and lease back .
“ Banks typically lend 60 per cent of the asset ’ s value , but through a sale and lease back they receive the full value of the property .
“ Selling their business premises to an investor and renting it back frees up much-needed capital in order to keep the business trading .”
John says Parker Barras is currently involved in completing an increasing number of these deals right across the UK , in commercial properties ranging from factories and warehouses to office space .
The company has also completed several such deals with social clubs .
“ The leisure industry has been hit hard by Covid and now , with energy costs spiralling , we ’ ve agreed sale and lease backs on a number of social clubs in the last three or four weeks ,” John says .
“ These businesses have found themselves unable to get funds from the banks , and the breweries are no longer providing finance facilities .
“ When arranging a sale and lease back for a social club , it ’ s slightly different than for other businesses .
“ Social clubs tend to need a level of
Raising money can be challenging in difficult economic times , but Parker Barras ’ s ‘ sale and lease back ’ option can enable businesses to continue trading
refurbishment as part of the sale and lease back , so the deal includes a full refurbishment of the club , to ensure it can keep trading .”
John explains this type of deal is normally concluded off-market , as businesses are reluctant for their customers or competitors to know their building is for sale .
“ We work in a confidential manner to ensure the much-needed funding is secured and the business survives ,” John explains . “ It ’ s quite a niche service where we have a proven track record of successes .”
The company expects to continue being busy , even during the current downturn in the economy , as more and more commercial property stock comes onto the market .
“ The market is a very different place to what it was several months ago , but from our point of view it ’ s a positive time ,” says John .
“ People are expecting a ‘ correction in the market ’, as it is known , which is ultimately a small drop , but there are still plenty of deals out there to be done .
“ We are dealing with plenty of active sales of commercial property and businesses .
“ A lot more of our work now is where people are considering their position – and a sale and lease back can be an alternative solution .”
Parker Barras can help extract maximum benefit from this type of transaction , navigating clients through what can be a complex process and helping them become more flexible and agile and generating liquidity .
John advises businesses considering a sale and lease back to ensure they take sound business advice from their accountants and business advisors as soon as they begin experiencing challenges .
“ If they leave it too late , ultimately they may not have a viable business moving forward ,” John warns .
“ We would encourage businesses who are thinking about a sale and leaseback to contact us for a no-obligation consultation .”
If you are considering a sale and leaseback of your property , Parker Barras can assist your business to receive 100 per cent of the property ’ s value .
For more information , visit parkerbarras . co . uk or contact John Taylor on 01642 987987 .
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