Why sell the very building upon which your business was built? Many will see selling your offices as an act akin to selling the business itself, with so much history and expertise embedded in every wall. The answer is a simple one and cited at an increasing rate; the good old-fashioned sale and leaseback scheme unlocks the value in your property.

Generally, moving away from owner-occupation has returned to favour, particularly in the legal profession's heartland, central London. For a significant and growing number of practices, the move has been an extremely worthwhile one for firms of all sizes, from large, multi-disciplinary practices to smaller boutiques.

The trend is not new; nor is it particularly of the moment. Memery Crystal showed the way in 2003 but, in the past 12 months, a strong and growing trend has emerged with players of all sizes such as Mishcon de Reya and Teacher Stern Selby, among others, selling their buildings.

There are two main reasons why this is happening now. Strong demand for such building and occupational leases has been led by real estate investors, such as property companies, funds and private individuals. Fuelled by tangible expectations of rental growth, purchase prices have risen to record levels.

Secondly, the introduction of self-invested personal pensions (SIPPs) has been a key accelerator. They are seen as a successful investment vehicle by practice partners, borne out by the high level of purchases (and returns) achieved by neighbouring partners in the first half of this decade.

The benefits are similarly clear. Firstly, there is an immediate cash return to the property-owning partners. Alongside that, the process can reduce a practice's effective tax rate to just 10% through business asset taper relief. As deal brokers, the practice can also benefit from the development of an accompanying lease to themselves on terms dictated largely to suit its partners.

Downsides should be noted. The practice could potentially lose strategic control of the building. Its maintenance responsibility will be more defined during occupancy and, when vacated, detailed dilapidation requirements must be met. It will have to meet a rent liability to another party and be exposed to rent reviews, as well as the additional cost of professional fees.

Furthermore, there could be problems with structuring a deal. As an example, one requirement may be that the original owning partnership will be different from those partners in the partnership taking the resulting lease. It is not uncommon for there to be distinct property-owning partners and leasing partners.

Behind all of this must be a clear business argument and decision. It should be undertaken with the application of a full cost/benefit analysis, together with knowledgeable professional advice, if the right move and terms are to be completed upon. There is no point in creating a healthy, short-term financial gain if it prejudices the future of the business.

So, how does it work in practice? It might be useful to provide an illustration. Deals are private matters, but for illustrative purposes we have renamed a recent practice that successfully sold and leased back its offices as Gallagher Hind and Bridges.

Gallagher Hind and Bridges has always taken strategic professional property advice. Specialists advised the firm that there might be significant proceeds derived from a sale and leaseback of its offices.

A detailed report was compiled setting out the potential benefits as well as the pitfalls. Clear solutions paved the way and set out how probable issues could be overcome through effective structuring of the resultant lease, making it more attractive to institutional investors. Key to the plan's implementation, a specialist real estate lawyer created fit-for-purpose documents, with continued input from both Gallagher Hind and Bridges and its property advisers. A new 15-year lease was adopted. It provided Gallagher Hind and Bridges as tenant with an option to break from the lease at the end of the 10th year under the protection of the Landlord and Tenant Act 1954. Rent reviews would be established for every fifth year.

To strike a balance between creating an attractive product for an investor, while protecting the interests of the vendor and any future tenant, a capped and collared first rent review was agreed. This provided the buyer with a guaranteed level of income performance and allowed Gallagher Hind and Bridges to accurately assess its rent liability over the next 10 years – a big business plus.

Once created, the lease was marketed to six parties who were known to the advisers as particularly keen to invest in this type of property product. Within a week, an attractive offer from a major UK pension fund to complete the transaction within a short timescale was won. The offer was accepted and three weeks later, the transaction was completed to the satisfaction of both parties and at a record price for the area.

The opportunity to structure a sale and leaseback deal, on terms that are of great benefit to your partners while retaining significant control over an important asset, is currently available in a particularly buoyant property marketplace. n