> Last week it was reported that Hilton hotels > were selling their buildings and land to a Scottish > banking group and leasing them back. > > This slightly surprising idea is similar to the thinking > behind the controversial private finance initiative in > the NHS (though that involves a separate capitalist company > being responsible for the costs of building the > hospital and risks of delay and error in estimates). What > they have in common is that building and land would be held > by a finance capitalist company, while the service enterprise > would be separate.
Sale and lease of land and buildings have been going on here in the US as well. One of the companies I worked at used this "tool" and I read about many more firms who made similar arrangements, sometimes using special purpose entities that are controlled by the firm. This is an accounting trick to send distorted signals to the "market" to deceive investors. Although I don't know how exactly it distorts the accounting information yet, I know roughly that it is a tool to hide debt from the public eyes. With the ongoing re-regulation wave, this practice will most likely be questioned as well. Hence I have doubts about what is below: > What interests me however is that this may be a > step towards the greater socialisation of land. Sabri
