The impact of sale and leaseback on commercial real estate prices and initial yields in the UK

IF 2.1 Q2 URBAN STUDIES Journal of Property Research Pub Date : 2019-07-03 DOI:10.1080/09599916.2019.1642370

Danielle Sanderson, Farazia Shakurina, Jolene Lim

{"title":"The impact of sale and leaseback on commercial real estate prices and initial yields in the UK","authors":"Danielle Sanderson, Farazia Shakurina, Jolene Lim","doi":"10.1080/09599916.2019.1642370","DOIUrl":null,"url":null,"abstract":"ABSTRACT This research evaluates the impact of Sale and Leaseback (SLB) on UK commercial property prices and yields, compared with arms-length transactions. Data on 357 SLB deals and 1266 non-SLB deals are extracted from CoStar and EGI. Hedonic regressions and comparative analysis with the risk-free rate are undertaken. In addition to the SLB dummy variable, explanatory variables include building size, quality, age, sector, location and year of transaction. SLB transactions are found to occur at a statistically significant price premium, with the greatest premium occurring in the office sector. SLB properties achieve a 4.5 percentage point premium compared with the risk-free rate. The net initial yield of the SLB transaction sample is around 2 percentage points lower than for the non-SLB sample in every sector. Reasons for these differences are probed by considering the effect of WAULT and tenant covenant strength. From a vendor’s perspective, the results give an indication of the price premium they might be able to negotiate for their property compared with market prices. This will help them assess whether SLB is worthwhile compared with other available financing options. The findings of a yield reduction should help investors decide whether to engage in SLB investment.","PeriodicalId":45726,"journal":{"name":"Journal of Property Research","volume":"36 1","pages":"245 - 271"},"PeriodicalIF":2.1000,"publicationDate":"2019-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/09599916.2019.1642370","citationCount":"8","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Property Research","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1080/09599916.2019.1642370","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"URBAN STUDIES","Score":null,"Total":0}

引用次数: 8

Abstract

ABSTRACT This research evaluates the impact of Sale and Leaseback (SLB) on UK commercial property prices and yields, compared with arms-length transactions. Data on 357 SLB deals and 1266 non-SLB deals are extracted from CoStar and EGI. Hedonic regressions and comparative analysis with the risk-free rate are undertaken. In addition to the SLB dummy variable, explanatory variables include building size, quality, age, sector, location and year of transaction. SLB transactions are found to occur at a statistically significant price premium, with the greatest premium occurring in the office sector. SLB properties achieve a 4.5 percentage point premium compared with the risk-free rate. The net initial yield of the SLB transaction sample is around 2 percentage points lower than for the non-SLB sample in every sector. Reasons for these differences are probed by considering the effect of WAULT and tenant covenant strength. From a vendor’s perspective, the results give an indication of the price premium they might be able to negotiate for their property compared with market prices. This will help them assess whether SLB is worthwhile compared with other available financing options. The findings of a yield reduction should help investors decide whether to engage in SLB investment.

查看原文

微信好友朋友圈 QQ好友复制链接

本刊更多论文

售后回租对英国商业房地产价格和初始收益率的影响

摘要本研究评估了售后回租(SLB)对英国商业地产价格和收益的影响，并与公平交易进行了比较。357笔SLB交易和1266笔非SLB交易的数据提取自CoStar和EGI。并与无风险率进行了享乐回归和比较分析。除了SLB虚拟变量外，解释变量还包括建筑规模、质量、年龄、行业、位置和交易年份。SLB交易发生在统计上显著的价格溢价，最大的溢价发生在办公部门。与无风险资产相比，SLB资产获得4.5个百分点的溢价。在每个行业中，SLB交易样本的净初始收益率比非SLB交易样本低约2个百分点。通过考虑WAULT和租户契约强度的影响，探讨了这些差异的原因。从卖方的角度来看，这些结果表明，与市场价格相比，他们可以为自己的房产讨价还价的价格溢价。这将有助于他们评估与其他可用的融资方案相比，SLB是否值得。收益率下降的研究结果应该有助于投资者决定是否从事SLB投资。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文去求助

来源期刊

Journal of Property Research URBAN STUDIES-

CiteScore

3.80

自引率

5.30%

发文量

期刊介绍： The Journal of Property Research is an international journal. The title reflects the expansion of research, particularly applied research, into property investment and development. The Journal of Property Research publishes papers in any area of real estate investment and development. These may be theoretical, empirical, case studies or critical literature surveys.