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Lease Liability Transfer

Lease Liability Transfer

A single solution for surplus property

There is a growing challenge to continually deliver savings on your real estate with limited resource and little or no capital. The key to achieving this is to focus on the operational real estate portfolio, where business continuity is fundamental and the real value and savings are found. As a result, the opportunity to achieve savings on your surplus properties often gets lost.

What are your current disposal options?

Traditional disposal options are challenging, time consuming and the end result is often a continuing residual liability with limited time to focus on these properties.

Traditional disposal options:

  • Manage in-house
  • Outsource to local or national agent
  • Mothball
 
  • Loss of focus of CRE team on operational estate
  • No clear exitroute
  • Cost of resourcing
  • Impact on management time
  • Retaining marketrisks

A single solution for surplus real estate

JLL offer a simple and more effective solution – The Leasehold Liability Transfer - allowing you to package up all of your surplus leases together and transfer to a specialist liability disposal team to take them off your hands at a fixed cost, significantly reducing the risk to you. Recently there have been significant developments in the Lease Liability Transfer ("LLT") market, particularly with regard to transaction structuring, which have made it a great solution for our clients.

Key benefits include:

  • Generate savings against provision
  • Provide certainty over exit costs
  • Save management time, resource and admin costs
  • Secure focussed management of the liabilities
  • Mitigate risk
  • Incentivised agreement with agents, profit sharing mechanisms

Where it has worked

In the last 12 months via LLT transactions we have successfully transacted on 3 surplus portfolios, a total of 84 properties with a gross liability of £88m have been disposed. The occupiers include Santander, Royal Mail and the Department of Business Innovation and Skills.

It saves significant time, resource and is priced very competitively versus a typical property provision, which is why it is being increasingly adopted by our clients.

 

 

Lease Accounting changes are coming...