Unlocking capital: sale and leaseback transactions in Poland’s real-estate market

Sale and leaseback (SLB) transactions have become a significant financial and strategic tool for Polish companies aiming to unlock capital while maintaining operational continuity. This growing trend is underscored by a marked increase in SLB activity across various sectors.

This article explores the strategic motivations behind SLB transactions in Poland and expands on the critical legal structuring considerations, particularly in complex transactions involving multiple properties and lease agreements tailored beyond standard market terms.

Unlocking capital without losing control
A primary driver for SLB arrangements is the ability to convert illiquid, owned real estate assets into immediate capital without impairing day-to-day business operations. Companies that own logistics centers, manufacturing facilities, hotels, or retail premises often hold significant real estate value on their balance sheets. By selling these assets to a third party and simultaneously leasing them back, they can reallocate capital toward core business objectives such as technological modernisation, debt reduction, or expansion into new markets.

This financing model is particularly attractive because it does not require new debt, nor does it dilute ownership in the company. The companies removing fixed assets from their balance sheets, improve capital ratios, and retain uninterrupted use of their properties.

SLB as a tool for corporate transactions and restructuring
SLB transactions serve multiple strategic functions depending on the corporate context.

In merger and acquisition scenarios, SLB offers a means to streamline the target company’s asset structure and generate liquidity prior to or during the sale. Similarly, when divesting non-core segments of a business, companies may use SLB to extract value from associated real estate while securing transitional or long-term tenancy rights.

In distressed or restructuring contexts, SLB can serve as a stabilising mechanism. Rather than liquidating strategic locations under duress, businesses can generate cash while preserving business continuity. From a legal perspective, however, distressed SLB transactions require careful risk management to avoid potential claw-back or avoidance issues under Polish insolvency law. The timing of the transaction and the consideration paid must align with arm’s-length standards to withstand scrutiny.

Multi-asset transactions and the role of the framework agreement
A frequent feature of modern SLB transactions in Poland is the inclusion of multiple assets located in different regions. To streamline such deals and mitigate fragmentation risk, parties often enter into a master framework agreement that governs the overarching commercial and legal terms of the transaction.

The framework agreement typically specifies the key elements applicable to all properties – such as the overall transaction value, conditions precedent, allocation of notarial and tax costs, lease duration, rent indexation method, warranties on title and environmental status, any particular business arrangements applicable portfolio-wide, including potential pre-emption or call option rights in specific situations, change of control clauses – and dispute resolution mechanisms. This umbrella document is then supplemented by individual asset sale agreements and lease contracts, which reflect asset-specific terms (rent levels, maintenance obligations, or fit-out allowances).

As a rule, and in line with the official guidance of the Polish Ministry of Finance, SLB transactions involving the sale of real estate are subject to VAT. However, in many cases, parties seek additional certainty by obtaining individual tax rulings, which confirm the tax treatment of the transaction. These rulings are often incorporated into the transaction documentation and form a critical part of the broader risk management strategy.

From a legal structuring perspective, the framework agreement should be designed to ensure cohesion across multiple closing dates, particularly in cases where assets are transferred in stages due to registration delays or permit dependencies. It should also harmonise termination and default provisions, especially in situations involving cross-default scenarios where a breach related to one property could have consequences for the others. Additionally, the agreement must maintain contractual clarity around conditions precedent, such as zoning compliance, the absence of encumbrances, or the completion of legal or technical due diligence.

In large portfolio SLB deals, clear coordination between real estate, tax, and corporate legal teams is essential to avoid inconsistencies or enforceability issues.

Lease agreements: beyond standard commercial terms
The leaseback element of the transaction is legally and commercially critical. While at first glance these may resemble typical long-term commercial leases, leaseback agreements in SLB transactions in some aspects deviate significantly from market norms.

Firstly, these leases are typically long-term (10 to 20 years) and often include automatic renewal options or mechanisms for renegotiation. The lessee (i.e. the original property owner) retains control over the property and therefore expects significant operational flexibility, such as broad use rights, subletting capabilities, and control over alterations or expansions.

Secondly, most SLB leases are triple-net in nature. Unlike most institutional commercial leases in Poland where despite the overall triple-net nature landlords remain responsible for some structural maintenance, capital expenditures, SLB leases generally transfer all operational and financial responsibilities to the tenant – including property taxes, insurance, and capital expenditures. This structure ensures that the buyer-investor is effectively insulated from operational risk and is assured of a net return.

Furthermore, termination and default provisions are usually more rigid than in standard leases. Since the buyer’s return depends entirely on the tenant’s continued payment of rent, tenants’ lease termination rights are carefully limited. At the same time, tenants often negotiate rights of first refusal or purchase options allowing them to re-acquire the property at the end of the lease term or upon occurrence of certain events.

The lease agreement must also carefully reflect any regulatory or public law constraints affecting the asset, such as zoning restrictions or obligations under applicable permits. Also, if the tenant intends to retain the right to modify the property during the lease term, the contract must define who is responsible for obtaining permits and who bears the cost and legal risk of such developments. While the tenant may generally enjoy broad autonomy in using and adapting the premises, it remains essential for the landlord to ensure that any alterations are subject to a level of consent that safeguards the long-term value and regulatory integrity of the property.

In some cases, the role of the landlord in SLB structures is reduced to little more than timely invoicing. Unlike in typical commercial property investments – where asset management teams actively monitor tenants, oversee maintenance, and optimise lease strategies – SLB arrangements often require no dedicated asset management infrastructure. This reflects the self-contained nature of these leases and the tenant’s assumption of full responsibility for the property’s operation and upkeep.

Conclusion
Sale and leaseback transactions in Poland have evolved beyond simple liquidity tools. They are now central to a wide range of corporate strategies, from M&A structuring to post-pandemic recovery plans. Even more, the legal design of these transactions – especially in multi-asset arrangements and lease documentation – is essential to ensure their success.

By anchoring multiple asset transfers under a robust framework agreement and customising lease agreements to reflect the true economic and operational realities of the deal, Polish companies and their investors can unlock substantial value while safeguarding long-term interests. As SLB continues to grow in relevance across Polish industry sectors, its success will depend increasingly on thoughtful legal architecture, not just sound financial logic.