Colliers International, noting the slowdown in the investment market, sees an opportunity for additional profits on the commercial real estate market in sales based on the lease return. The increase in the number of SLB transactions (Sale & Leaseback) coincided with the peak of the economic crisis in 2007-2009, when it reached 13 percent.
Good projections for SLB transactions
Sales based on a lease return is small. Transactions of this type is only 10 percent. of agreements concluded in the investment market since 2007 - according to a report of Colliers International. However, experts are optimistic.
- While the SLB agreement so far were only 4.5 percent. of all transactions in Eastern Europe, this is the current market situation characterized by limited credit, subdued economic growth and low availability of debt financing, so it makes a convenient base for SLB transactions. If market conditions do not change, and there is a good chance for it, such transactions may be a growing source of raising capital and investment transactions in the short and medium term - Damian Harrington Regional Director of Department of Market Research Consulting, Colliers International. - SLB transactions should not be equated only with major commercial real estate sectors.Our analysis of SLB transactions shows that they can be successfully used in different sections of the market. It is a relatively smooth nature of the transaction that brings together key players in the market.
Experts point out that SLB transactions may become a significant source of investment operations in the long run. They can also help in raising capital while providing investors access to safe and long-term cash flows.