Covid-19 - Can I use my property to unlock equity?
Category Commercial Property News
In good times, many businesses choose to own their own property. This is often a sound strategy as you avoid annual rental escalations and you own an appreciating asset.
However, in more economically stressful times, it provides one with a significant opportunity to sell one's property and employ the funds in one's business which is more important to your livelihood.
Typically a business would achieve higher returns on capital ( circa 25%) than a property would ( circa 10% ignoring capital growth).
A good example of this is in the case of the Shoprite Group. Traditionally they chose to own many of the shopping centres they anchored. However, recently they have been unlocking value by selling these properties and signing favourable headleases and selling them to investors, thus unlocking significant value from their portfolio to release into their business which had a commensurate positive effect on their share price.
The current lockdown is almost certain to be putting a financial strain on every business. A sale and leaseback may be the solution to keeping your business alive.
We are available to value your property remotely with the tools we have available (ideally we need to view the property but we can arrive at a value that is pretty much accurate). More importantly, you would like to know what equity you can derive from your property after settling the outstanding bond and paying the CGT. We can assist you with all of this during the lockdown.
Once we have settled on a value and rental we can immediately commence with offering your property to our investor base. We have sold many investments through electronic viewings, videos and pictures.
Once the country awakes from lockdown, you could already have sold your property, just subject to a viewing by the investor.
Click here to book a call at a time that works for you.
Andrew Jefferson has been a Director at Annenberg Property Group since 2014.
Email clientneeds@annenberg.co.za or chat to our team on www.annenberg.co.za
Author: Andrew Jefferson
