GC Gauteng is currently negotiating sale and leaseback transactions to a total value of over R400 million.

Comments Powell: "For such companies the sale and leaseback of their property is an attractive and viable option. There are investors in the marketplace who have an appetite to purchase sale and leaseback properties, preferably industrial in nature, in visible, strategic locations.

"In terms of industrial property the areas of the East Rand, Midrand and Centurion are favoured, and in regard to very large industrial properties it is preferred that these would comprise a main warehouse or factory which would be located near OR Tambo International Airport. Regarding office space the property would ideally be situated in an established office node," says Powell.

She says generally investors are looking to purchase at a market related amount, with a key requirement that the property would have a single, stable tenant on a lease of 10 years or more. Rentals negotiated are market related, and the selling price would equate to this at a yield of around 10/11 percent. However, investors are flexible in their approach, based on varying factors.

Adds Powell: "Naturally in the current economic climate there are also businesses experiencing financial constraints, which makes a sale and leaseback a means of easing cash flow problems. However, the bulk of our sellers reiterate that they are not in the business of property and want to focus on their core activities."