Sale and leaseback transactions in Poland

What is a sale and leaseback transaction in the Polish market?

In Poland, sale and leaseback (SLB) transactions are increasingly used to combine liquidity with operational continuity. In a typical structure, a company sells an asset – most often real estate or key infrastructure – to an investor and simultaneously leases it back for continued use. This allows the seller to release capital tied up in fixed assets without interrupting business activity, while the investor acquires an income‑producing asset supported by a long‑term tenant. That combination explains why sale and leaseback transactions continue to attract attention from businesses, investors, and legal advisers alike.

At its core, a sale and leaseback transaction involves a company selling an asset (most often real estate or key operating infrastructure) to an investor and simultaneously leasing it back for continued use. The structure allows the seller to release capital tied up in owned assets while preserving business continuity. At the same time, the investor acquires a property supported by a lease‑backed income stream. This dual logic explains why sale and leaseback transactions continue to attract attention across the market and why they remain of particular interest to both investors and legal advisers.

The appeal of a sale and leaseback transaction lies not only in its financial logic but also in the strength of its legal design. Thorough due diligence is essential to confirm title, identify encumbrances, and verify compliance with zoning, permitting, and other administrative requirements, since these issues go directly to asset quality and security of income. Where the property is subject to an existing mortgage, coordinating its discharge or substitution at the point of closing becomes a critical element of transaction management and must be addressed in the transaction documents. A robust due diligence process in a sale and leaseback transaction directly affects asset quality, security of income, and the overall risk allocation between seller‑tenant and investor.

How should the lease agreement be structured in a SLB deal?

The lease agreement in a sale and leaseback structure is equally important because it defines the long‑term relationship between the parties after closing. It should address rent and indexation, lease term and renewal rights, maintenance and repair obligations, taxes, insurance, and termination mechanisms. A well‑drafted lease does more than record commercial terms: it allocates risk in a way that keeps the arrangement workable over time. As regards the lease agreement in a sale and leaseback transaction, investors should also consider whether to ask the tenant for additional security in the form of a bank guarantee, a cash deposit, or a voluntary submission to enforcement by notarial deed, which enables the investor to pursue unpaid rent or other amounts due without the need for full court proceedings – a significant practical advantage in the event of the tenant’s default.

What are the benefits and risks of sale and leaseback transactions in Poland?

From a business perspective, the main advantage of a sale and leaseback transaction is immediate liquidity. By monetizing owned assets, a company can release capital for debt repayment, expansion, acquisitions, or broader corporate purposes. In the Polish market, where many businesses still hold significant real estate, this can be an attractive alternative to conventional bank financing. At the same time, the seller retains operational use of the asset through the lease, which is particularly valuable in the logistics and industrial sectors, where relocation may be costly or commercially unrealistic. In this way, sale and leaseback transactions in Poland may reconcile capital needs with the practical requirements of ongoing operations.

Sale and leaseback transactions, however, require careful structuring. One important risk is recharacterization if the arrangement does not genuinely reflect the features of a sale, for example where pricing or buyback terms undermine its economic substance. In real estate deals, analysis is also needed to determine whether the transaction involves a simple asset transfer or the transfer of an organized part of an enterprise, since that distinction may carry broader legal and tax consequences. Market factors can also affect execution of sale and leaseback transactions. Outside the main urban centers, investor appetite may be more limited, and currency exposure may arise where lease payments are denominated in euros, but revenues are generated in Polish zloty. In addition, investor interest depends heavily on the tenant’s financial standing, making creditworthiness a central issue in both due diligence and valuation.

How does Polish law regulate real estate sale and leaseback transactions?

Under Polish law, real estate sale and leaseback transactions must comply with the provisions of the Civil Code governing the sale of immovable property, which requires the execution of a notarial deed for the transfer of title to be legally effective. This formal requirement is a key element of the legal framework for sale and leaseback deals involving real estate in Poland.

For Polish businesses, sale and leaseback transactions can offer a practical route to liquidity without sacrificing control over essential assets. For investors, it may provide access to stable income streams backed by long‑term occupation. Their value, however, depends on careful legal structuring, robust due diligence, and a realistic assessment of market and credit risks. When designed properly, sale and leaseback arrangements can be an effective tool for balancing commercial objectives with legal certainty. If you need support with structuring, documenting, or assessing risks in sale and leaseback transactions in Poland, consider seeking advice from an experienced legal and transactional team.