Mercadona has sold 27 of its stores using a sale-and-leaseback arrangement, a financial strategy that Kaizen Consulting recommends to our clients and has successfully implemented in various companies over the past two years. As reported by *Levante*, Mercadona transferred ownership of these 27 store locations to an investment fund and signed a long-term lease agreement. This allows the stores to continue their operations. According to the report, Mercadona raised over €100 million from the sale and continues to operate the stores under a rental agreement.
At Kaizen Consulting, we specialize in asset finance, including leaseback and rent-back solutions, which enable companies to monetize their balance sheets by obtaining liquidity and leveraging their own resources for financial advantages. As our Managing Partner José Roca explained in an article in *Valencia Plaza*, these are innovative formulas that “involve the sale of company assets to a firm, which then leases the assets back to the original owner for a specified period and agreed-upon payments outlined in a contract.”
José Roca believes that “a leading company utilizing a leaseback arrangement will encourage many firms to explore asset finance options to secure liquidity, fund projects, support expansion, or simply remove non-productive assets from their balance sheets. At Kaizen Consulting, we are experts in this field and work with a broad ecosystem of national and international operators to secure the best terms for our clients based on their needs.” According to *Levante*, the supermarket chain “has decided to sell some of its stores to gain liquidity and accelerate its transformation.” *Alimarket* also notes that this is the second major transaction of this type carried out by Mercadona. Other major entities, such as Banco Santander, BBVA, and El Corte Inglés, have recently sold property using sale-and-leaseback arrangements.
Applications of Leaseback
Leaseback or rent-back can be applied to almost all company assets, including “industrial machinery, IT and office equipment, software, lighting, servers, transport elements, construction materials, real estate, industrial or logistics warehouses, hotels, offices, residential properties, etc.,” explains José Roca. He highlights that real estate “can represent a significant source of financing for companies undergoing growth and investment, but also for debt refinancing and establishing more manageable long-term amortization schedules. These solutions are particularly relevant for the current economic environment.” Leaseback arrangements are highly flexible, covering a wide range of amounts, tailored to meet specific needs, and are effective for obtaining liquidity using existing resources: ownership and title of the asset change hands, but “the asset remains in the company’s facilities, continuing to be used and exploited as it was before the transaction.”
José Roca points out additional benefits of leaseback and rent-back: “From a risk analysis perspective, it provides greater options since it not only assesses the company’s solvency but also considers the value of the asset involved. This balance sheet monetization expands cash flow and, being an off-balance-sheet financing (not considered debt), it does not impact the company’s liabilities (not registered as debt) or affect its CIRBE (Central Risk Information System) reporting, thus not limiting the company’s ability to secure further financing from its banking pool.”
Advantages of Leaseback
These transactions offer advantages similar to those of renting or leasing: tax benefits (100% deduction of the lease payment as an expense, 100% VAT deduction, deferred VAT payment aligned with lease payments). Additionally, renting enhances the Net Equity level and improves solvency and financial autonomy ratios.
