Generally speaking, assets with short
lifecycles are worth less at the end of lease than those with
longer lifecycles. Therefore it is harder to get value out of them
at end of lease. This is behind the mass exodus of balance sheet
lessors from these sort of deals.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Machinery in the £500,000 -plus bracket,
however, offers a safer position. As this issue’s auction house
survey shows, demand for British plant is still growing abroad, and
the rise of online auctions is only helping this trend.
Even though mid-ticket plant assets are
prolific in troubled sectors such as print and manufacturing, their
long lifecycle and predictable depreciation curves make them a wise
choice for a lessor who is willing to put a focus on asset
knowledge, rather than lessee balance sheet, at the centre of its
risk strategy.
In addition, with refinancing and
sale-and-leaseback on the rise in all sectors, 2009 will most
likely see plenty of Britain’s unencumbered static plant refinanced
in order to provide much-needed capital for manufacturers waiting
for the orders to resume.
