Rent collection rates improve as tenants find their footing

Commercial property owners have collected nearly three-quarters of June rent owed at the 21-day mark, reaching the highest level seen at the same point of any financial quarter during the pandemic so far. Tenants have paid 73.9% of total rents due within the 21-day period, according to Remit Consulting’s latest Remark report, which covers around 125,000 leases on 31,500 prime properties. This compares with 67.3% collected at the same point in the previous quarter, and 59.2% year-on-year. The retail sector showed the most improvement during the period, with landlords receiving 69.6% of June rents. This was up on 57.8% received 21 days after the March rent day, and 47.7% in the previous year. The leisure sector has also shown significant improvement, with 49.5% of rents collected at the 21-day mark. In the March quarter, the equivalent figure stood at 38.4%. The report also found that service charge payments have risen marginally, with a total of 66.8% paid by businesses within 21 days of the due date. This compares with 64.7% received 21 days after the previous quarterly deadline. Source: Remit Consulting Steph Yates, a senior consultant at Remit Consulting, said the industry is “on course for the highest total of quarterly payments recorded so far during the pandemic”. “The improvement seen by the retail and leisure sectors will be particularly welcomed by investors and is a reflection of the relaxation of many of the Covid-19 restrictions over recent weeks,” she said. Yates highlighted that a number of landlords do not expect to grant any more concessions over the course of the next quarter. These include British Land and Hammerson. However, Yates predicted that investors will continue to experience a shortfall in income while the government’s moratorium continues. She said: “It is clear that a significant number of tenants are still unable, or unwilling, to make the payments that they owe, and while the government’s moratorium on evictions of business tenants for non-payment of rent continues, we expect that the shortfall in income experienced by investors will increase further.” Remit estimates that since the start of the pandemic in March 2020, property owners are owed some £6.4bn in unpaid rent, equating to around £1 in every £6 of rent due going unpaid. To send feedback, e-mail pui-guan.man@eg.co.uk or tweet @PuiGuanM or @EGPropertyNews Photo © Hammerson