Public Sector

The FinReal Model

A property portfolio or its building plot is sold and rented (back) by the seller on a long-term basis under a finance lease or leasehold, usually over 80-100 years. During the lease period the seller/leaseholder has the right to buy back the sold property at certain dates. At the end of the lease period - after 80-100 years - the buyback is free of charge (f. example EUR 1.-).

Suitable sales objects

  • Strategically important properties such as important airports, train stations, hospital buildings, training centers (universities, schools, etc.), power plants, railways, government/official buildings, social housing, etc.
  • Landmark objects, such as football stadiums, parking garages, certain city hotels, etc.
  • Rental apartment houses.

Advantages of the FinReal Model

The attraction of the FinReal Sale & Leaseback model as a funding tool for Public Sector Entities:

  • Through the sale the Public Sector owner immediately receives the full market value, in cash, but can continue to use the entire property (including the building site) without restrictions - through the leaseback - as if the property had never been sold.
  • Raising capital without raising debt in the credit or capital market. Attractive way for real estate owners in the public sector to raise capital, as it saves them the often bureaucratic and time-consuming process of tapping the credit/capital market and does not impact or (even) jeopardize their creditworthiness and credit rating.
  • The use of idle capital increases efficiency, as (also) the non-earning part of the property portfolio - the ground - is converted into cash, which creates added value through higher income or lower cost or simply by enabling the realization of "common-good" projects.
  • Access to ultra-long-term funding - comparable to a perpetual bond (without a put) - a funding niche which is usually not available.

  • Low and stable funding cost thanks to the general deflationary environment. The leasing rate should remain low over the long term - even after any inflationary adjustments - as the deflationary pressure in the economy is widely expected to remain in place.

  • Flexibility due to the buy-back option, which enables an early exit on different dates with a buy-back price of only 1.- (in EUR/CHF/DKK/SEK) at the end of the lease period.


Interested? Get in touch!

If you have a specific project or questions about the FinReal concept, do not hesitate to get in touch. Together we can work out a suitable financing solution for you.