This year is set to see an escalation in UK sale-and-leasebacks, driven principally by companies burdened with pension deficits.
In the FTSE 100 alone, the cumulative FRS 17 pension deficit is in excess of £37bn.
Close Brothers has calculated that these companies, excluding pure property firms, hold more than £100bn in freehold property assets.
The corporate finance house says a key driver of the rise in sale-and-leasebacks is the Pension Regulator’s new approach of scheme-specific funding for defined benefit schemes.
This has given pension fund trustees significant powers to negotiate with companies over how pension shortfalls will be addressed.
Simon Tilley, an assistant director at Close Brothers, said: “Sale-and-leasebacks will be one of the quickest, easiest and most popular ways of dealing with pension fund deficits.”
References: EGi News 17/03/06
