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5 reasons to consider a sale & leaseback for your industrial warehouse


One of the hottest topics in commercial real estate right now – so how can you capitalize on the market interest in industrial property?

 

There is considerable interest from Australian and offshore investors in the Industrial asset class, which has only amplified in the last 12 months. With logistics and supply chain now part of the everyday vernacular, how our goods move around the country and beyond is now more considered than ever before.

 

If you own the warehouse that your business occupies, then you could consider a sale and leaseback for your industrial property. By becoming both the lessee of your premises as well as the seller, you have the opportunity to negotiate from a position of strength and unlock capital to invest into your core business.

 

A sale and leaseback involves the owner selling the premises and then leasing it back over an agreed term. This keeps you in the same location but provides the opportunity to capitalize on the property market and use the capital elsewhere in your business.

 

Here are the top five reasons to consider a sale and leaseback for your industrial warehouse

 

1. Unlock capital

You will have noticed industrial property continuing to attract investment attention and the market is experiencing significant growth. By unlocking capital through a sale and leaseback structure, this will allow you to capitalize on the interest in industrial real estate

 

2. Reinvest into your business

If property is not your core business but you need a warehouse or industrial facility to run your business effectively, a sale and leaseback structure effectively offers the best of both words. By unlocking capital from your property holdings, you are able to reinvest into your business in new technologies, improved efficiencies in your warehouse, upskill your staff, etc.

 

3. Capitalise on the strength of the Australian industrial property market

The industrial property market is in high demand across Australia, particularly for long-term leased industrial investment properties. To an investor, a securely leased premises to a long-term occupier can be a compelling investment opportunity that appeals to multiple buyer types. Owner occupiers can be in a position of strength in negotiations to attract the best outcome.

 

4. Flexibility for your business

Depending on your operating needs, owners can seek the right terms for their tenure in the property after the sale to provide the right flexibility needed for your business. Our experts can help with the right leasing structure for your business.

5. An alternative to conventional financing

Businesses can investigate a sale and leaseback structure as an alternative from borrowing from more traditional sources. Businesses can utilize this method as an alternative to debt financing, by funding their business expansion via the equity through your property. By realizing the value of your property, you can invest this back into your business for increased returns and business growth.

 

It is important you engage with the right experts when considering this complex structure. Our industrial property experts at Colliers maximise the potential of property to accelerate the success of our clients. To investigate how a sale and leaseback structure might work for your business, contact our experts below.

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