Some of Britain’s biggest businesses have cashed in over the last few years by deciding to sell and rent back their properties.
You might think that owning the largest commercial property estates in the UK outright would be an enviable position for some of Britain's biggest and most respected businesses. But many of them have done their maths and realised the benefits of deciding to sell and rent back their properties.
They have made the decision to sell and rent back for a variety of reasons – some to clear mountains of debt, some to generate lower operating costs in their day-to-day business, and others because spiralling property values mean they can make a handsome profit that would otherwise take years to accumulate. And the good news is that most homeowners in the UK can sell and rent back too – and get the same benefits.
Biggest sell-and-rent-back in Europe
Telecoms and computer services giant BT made the decision to sell and rent back its property portfolio in 2001. It owned 6,700 properties – 5.5 million square metres of space – which it sold for £2.38 billion in one of Europe's biggest ever property deals.
At the time, BT was crippled by debt and its share price had plunged. It was also spending a fortune on property maintenance and realised it could save money by handing that responsibility over to a landlord.
John Pike, head of BT Property Partners, said of the sell-and-rent-back idea, "Debt reduction was a key aim, but there was also a desire to refocus on our core competencies, of which property management is not one." The company is now generally reckoned to be back on track and is making big profits again.
Southern Cross sell and rent back care homes
Another company, Southern Cross, the biggest owner of care homes in Britain, was able to expand rapidly in 2007 thanks to its sale-and-rent-back policy. It bought a number of care homes, including 15 in one deal for £96.5 million. Southern Cross doesn't actually need to pay out that much money, though – it buys a care home, sells the property to a real-estate company, and rents it back. Like BT, it can therefore run its business – in its case, caring for the elderly – and only has to pay a rent on its properties, rather than a hefty mortgage plus building maintenance and repair costs.
Other companies have been able to cash in on rising property prices and one man in particular has a successful record of making profits for companies with a sell-and-rent-back policy.
Sell and rent back supermarket sweep
In 2005, Robert Tchenguiz led a group of investors that bought Somerfield, the supermarket chain. He arranged a sell-and-rent-back deal for £400 million of its property, and plans to sell £1 billion more – a cash bonanza that even businessmen used to dealing in millions of pounds cannot afford to ignore.
Tchenguiz previously made a fortune doing the same thing with hotels, cinemas and pubs – all businesses where he could sell and rent back the property to generate cash to improve the companies' profits. He recently bought a large stake in the Sainsbury's supermarket chain and may cash in on their many properties as well.
And in all cases, people may find running their home cheaper when they sell and rent back – as Southern Cross do – because they just have the rent as a monthly outgoing, rather than a hefty mortgage plus the repair, building insurance and maintenance bills.
Could you sell and rent back?
The same logic used by Tchenguiz and other big business people can be used, on a smaller scale, by just about any homeowner in the UK. Anyone who is facing debt problems, including mortgage arrears, can "re-finance" their own lives by deciding to sell and rent back their property, in the same way BT did.
Sell and rent back with sellandrentbackltd.co.uk
If you're caught in a financial house-trap, sellandrentbackltd.co.uk can throw you a life-line. Sellandrentbackltd.co.uk offers a sell and rent back scheme for those who like living where they are and want to maintain stability but are facing mortgage arrears, repossession, bankruptcy and debt or concerned financial meltdown is looming. The sell and rent back scheme is an alternative to selling up and moving, allowing you to stay put and find financial solutions. Sellandrentbackltd.co.uk will buy your home and allow you to continue living in it as a tenant. Find out more, call Sell and Rent Back Ltd. today on: 08000 255 870.