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B U S I N E S S

aestheticmed.co.uk FINANCE

To sell,

or not to sell?

Real estate lawyer James Polo-Richards explains the
pros and cons of a sale and leaseback deal, and why it
might be a viable option for struggling clinic owners

financial
packages
the
businesses,
F or many will provide much needed support and investors, are looking at a range of opportunities at the
moment. Many funds, unless they can negotiate or revise
offered by the UK Government in an attempt to
keep the economy afloat during the coronavirus
terms, may be bound by conditions to spend cash they have
pandemic
raised by a certain date; and individual investors may see
respite. Nonetheless, for many the money cannot
come quickly enough, with the business secretary now little value in the interest rates offered by banks or not be
prepared to risk the current volatility of the stock market.
acknowledging that more money needed to go out faster. Accordingly, there are people in the market who have
The property world has been exploring alternative ideas cash to spend, as evidenced by the recent deal announced
for raising cash quickly and, in doing so, has dusted off an by retailer Next, which has sold three logistics warehouses
old favourite – the sale and leaseback. in the UK to Aviva Investors, through its Lime Property
Fund. The three large distribution units, which are central to
WHAT IS A SALE AND LEASEBACK? Next’s storage and distribution capability, were sold in total
A sale and leaseback deal does very much what it says for around £110 million and immediately leased back.
on the tin – the owner of a property sells the property to In this instance, it is clear the investors believe the
another party and, as part of the transaction, agrees to logistics sector offers long-term resilience as retail firms
take a lease of the property back immediately. A sale and improve their distribution capabilities and recognise
leaseback can provide an alternative means of raising the benefits of having a high-quality tenant who now has
finance for a company which may prefer to free up cash in the funds to ensure their continuing success. If you are
the business rather than approaching a bank for the money. considering a sale and leaseback deal as an option for
In addition, many property investors including large your aesthetic clinic, the most important advantages and
funds, private equity houses and smaller individual disadvantages are outlined below:

Aesthetic Medicine • June 2020 19