Sale and Leaseback
Sale & leaseback—often referred to as Sale & Leaseback (S&L)—is one of the most practical financial strategies for companies that want to release capital tied up in real estate while continuing to use the property without interruption. While it has long been standard practice in mature international markets, it is increasingly being adopted across Central Europe as businesses look for flexible funding solutions.
In a typical transaction, a company sells its owned property to an investor and simultaneously signs a long-term lease agreement, remaining in the building as a tenant. The proceeds can then be deployed where they create the most value—most commonly toward growth initiatives, modernization, technology upgrades, debt reduction, or strengthening cash flow.
Who Sale & Leaseback Works Best For
This model is most often used for properties that are critical to day-to-day business operations, such as:
- manufacturing sites and production facilities
- warehouses and logistics hubs
- retail units and commercial premises
- office buildings and corporate headquarters
Sale & leaseback can be especially relevant for companies aiming to improve liquidity and optimize their balance sheet without relocating or compromising operational continuity.
Sale & leaseback can be especially relevant for companies aiming to improve liquidity and optimize their balance sheet without relocating or compromising operational continuity.
Key Benefits of Sale & Leaseback
1) Access to Capital at Market Value
A sale & leaseback can allow a business to raise capital close to the market value of the property, depending on the asset quality, location, lease structure, and tenant covenant.
2) Flexible Use of Proceeds
Unlike many traditional loan products, sale & leaseback typically does not impose strict “use-of-funds” restrictions. Businesses can allocate capital according to their priorities—such as reinvestment, refinancing, working capital, CAPEX programs, debt reduction, or dividends.
3) Long-Term Stability and Operational Continuity
Lease terms are agreed upfront, and contracts are commonly structured for longer periods, providing planning certainty and ensuring the business can operate from the same premises without disruption.
4) Stronger Balance Sheet and Risk Management
For many companies, this structure reduces the concentration of capital in a single real estate asset and improves capital efficiency. It can also help “unlock” value from properties that support operations but may not be optimal to hold on the balance sheet.
5) Cost and Tax Efficiency Logic
Rent payments are typically treated as tax-deductible operating expenses (subject to local rules and the specific structure). At the same time, the company reduces the need to allocate capital to owning property that primarily serves operational use.
Why Sale & Leaseback Is Gaining Momentum
In an environment where businesses face pressure to invest, modernize, manage operating costs, and preserve liquidity, sale & leaseback is increasingly viewed as a credible alternative to traditional debt financing. It enables companies to shift capital from “bricks and mortar” into the real drivers of competitiveness—people, technology, product development, and expansion—while maintaining control over day-to-day operations through a stable lease structure.
At CORE, we approach sale & leaseback not as a simple property sale, but as a strategic financial optimization process. We support clients end-to-end, typically covering:
- assessing whether the model is suitable and defining objectives
- preparing an investor-ready story and transaction materials
- identifying the right investor counterparts and running negotiations
- structuring lease terms (tenor, indexation, options) to protect operations
- coordinating legal, financial, and process steps through to closing
Considering a Sale & Leaseback? Contact the CORE team to evaluate whether this strategy fits your asset and business objectives—and how it can strengthen your financial flexibility.
