An industrial sale-and-leaseback lets an owner-occupier sell their warehouse or manufacturing facility to an investor and immediately lease it back on a long, indexed lease. It typically unlocks 100% of the property value at yields of 6.00%–7.50% depending on covenant, without disrupting operations. For investors it produces a fitted-out asset with a proven operating covenant and no development risk.
A sale-and-leaseback (SLB) is a transaction in which an owner-occupier sells the freehold of its industrial property to an investor and simultaneously signs a long lease to continue occupying the same building. Operations do not pause. The owner exits the real estate line of their balance sheet and reinvests the proceeds in their core business.
According to Savills' European Sale-and-Leaseback research, industrial SLB volumes have grown as European corporates have prioritised capital efficiency and returning capex to operating businesses.
SLB pricing is driven by three variables: the tenant covenant, the length of the leaseback, and the indexation. A strong-covenant (investment-grade) 20-year CPI-indexed leaseback in a Tier 1 European market can trade at 5.75%–6.25%. A mid-covenant 10-year lease in a regional market may price at 7.00%–8.00%. Building specification matters less than covenant and lease.
Investors want a real business in the building, not just a real estate story. They underwrite the tenant covenant first (audited financials, EBITDA coverage on rent), the site's alternative-use value second, and building specification third. The strongest SLBs combine a proven operating tenant, a genuinely industrial location, and a lease long enough to survive at least one economic cycle.
For asset owners considering an SLB, our seller advisory team runs the structured process. For investors, the off-market warehouse deals article explains where these trades tend to originate.
A sale-and-leaseback typically releases 100% of the property's market value in cash at closing, without operational disruption. This compares to a mortgage which usually releases 55%–65% LTV and adds interest cost. SLB is the most capital-efficient way for an owner-occupier to monetise real estate.
Prime industrial SLBs with investment-grade covenants and 15–20 year indexed leases trade at 5.75%–6.50%. Mid-market SLBs price at 6.75%–7.75%, and value-add or short-lease SLBs at 8.00%–10.00%. Covenant and lease length drive pricing more than building specification.
A well-run SLB typically closes in 10–16 weeks from marketing launch to completion, sometimes faster off-market. The bulk of the timeline is investor due diligence on the tenant covenant and lease documentation rather than physical property surveys.
Yes, and they are one of the most common exit vehicles for founder-led industrial businesses. SLBs let owners retain operational control while monetising the real estate value that would otherwise remain trapped on the balance sheet. Structuring the lease correctly protects long-term operational flexibility.