Transmission Wire

As the effects of the recession begin to wear off giving rise to hopeful markets once more, the climate has turned favourable for leaseback sales. A number of such deals are being handled by property agents CBRE.

Leaseback sales are becoming very popular across Europe, if the increase in such dealings is any indicator. From 6% of the total property dealings in 2004, these deals now account for nearly 17% of real estate market business now, even when figures are collated for just the first two quarters of 2009. These figures have been presented in a new report by CBRE. According to them, there is potential for another £2 trillion pounds of business with properties owned by businesses across the EU.

Leasebacks are a relatively new entrant in the markets, with one of the first such deals being consummated by HSBC when it sold its Canary Wharf headquarters to National Pension Service of Korea. In such a leaseback deal, the owner of a property sells the premises to another and then leases it back for own use. This deal is undertaken to free up the much-needed capital that is invested in the property.

The property agents also remarked that they are currently working on similar deals to the tune of 3b, which is a huge exponential increase when compared with figures of 1.5 just a year ago. Given that there is currently a shortage of prime office spaces, these deals will push up the commercial activity in this sector now. In fact, while rents have fallen drastically otherwise, quality desk space is being tenanted at high rents.

CBRE sources state that companies that undertake such deals will be making a good financial decision, given the current economical climate.