What is being sold

The buyer pays a lump sum today for the right to collect the rent from a contract, for some years or for the rest of its term. Some offers include the land as well. If the offer does not, the lease stays as it is and only the party collecting the rent changes.

In Chile these sales are usually structured as an assignment of receivables (cesión de créditos), which has no effect against the party paying the rent until the buyer notifies it or it accepts the assignment (Civil Code, Art. 1902).

We work on leases and easements for energy projects.

Three questions before you answer

What rate the offer implies

An offer below the simple sum of the rent implies a discount rate. We compare it with alternatives of similar risk.

Calculate it with your figures

What is sold and what remains

Term, rent indexation, variable rent and extensions. Rent after the period sold has value even if the offer does not recognize it.

What happens to the land and the lease

Whether the offer also asks for the land, and who will be able to amend or terminate the lease after the sale.

Implied discount rate calculator

Enter your contract figures and the price you were offered; the result updates as you type. Use your contract currency (CLP, UF or USD) for both the rent and the offer.

Current annual rent

Years of rent being sold

Expected annual rent indexation

Price you were offered

In the same currency as the rent.

Your comparison rate

The annual return you would expect from that money in an investment with risk similar to a lease in force.

Example with made-up figures

11.3%

Discount rate implied by the offer, per year

The offer pays 86.1% of what that rent is worth at your 8% rate.

Offer: 6,500,000
Value of the rent at your rate (8%): 7,550,134
Simple sum of the rent, undiscounted: 11,463,879

Figures as read: annual rent 1,000,000, 10 years, indexation 3% per year, offer 6,500,000, comparison rate 8%.

Ask us to review the offer

Assumptions: annual rent paid at the end of each year; the first payment is the current rent and later ones grow with the indexation. The higher the implied rate, the less is paid today for the same rent. It ignores taxes and the risk of whoever pays the rent, and it is not a recommendation. The figures you enter never leave your browser: they are not sent or stored.

If you are the buyer

If you are an operator or a fund, we help you structure the offer and present it to the landowner. What most affects the landowner's answer:

Not requiring the land along with the lease income
Accepting partial deals, by term or by a share of the rent
A discount rate the landowner can compare with alternatives of similar risk
Keeping the landowner in the relationship with the tenant

We work for one party per engagement, and only that party pays us. Independence rules

We do not give legal, tax or investment advice. Legal advice comes from your Chilean counsel or an outside lawyer we work with, and tax advice from your accountant.

Let us review the offer for your rent

The type of contract, the years of rent being sold and whether you have the offer in writing.

Tell us about the contract

Email: contacto@puntacolorada.cl

We sign a non-disclosure agreement before we receive any documents.