Commercial rent collection reaches new peak

Commercial landlords have collected the highest level of rent since the coronavirus pandemic first hit, according to the latest figures from Remit Consulting. It found that the collection of commercial property rents in the UK, seven days after the September quarter due date, reached the highest level achieved for any quarter during the pandemic so far. The figures for collection of rent and service charges, which are verified by the country’s major property management agents, reveal that, overall, an average of 72.1% of rents due from tenants of commercial property were collected within seven days of the due date. This compares with a figure of 66.5% collected at the same point in the previous quarter. According to Remit Consulting, both the retail and leisure sectors showed significant improvements compared with previous quarters during the pandemic. Overall, 68.8% of retail rents were collected seven days after the September quarter day, compared with 62.3% at the same stage of the June quarter. Similarly, 57.2% of rents for leisure properties were collected, compared with just 40.1% in the June quarter. The improvements were reflected by the sub-sectors, with 67.1% of high street retail rents having been collected and 46.8% of rents for pubs, bars and restaurants. Steph Yates, a senior consultant at Remit, said: “The first seven days of the current quarter saw a rapid increase in the collection of rents and service charge payments, which is good news for investors and landlords such as pension funds and other institutions, particularly as the upward trajectory of payments from tenants is similar to the previous quarters of the pandemic. However, this quarter, the collection rates are, on average, around six percentage points higher than the previous quarter, which was, in turn, the best three-month period of the pandemic so far. “While the signs are promising, overall collection rates for both rents and service charge payments are still significantly lower than recorded by the REMark report over the 10 years prior to Covid-19.” According to the firm’s research, since the start of the pandemic in March 2020, investors and property owners, which include many pension funds and other institutions, have seen a shortfall in the rent they have received from commercial occupiers of almost £7bn. To send feedback, e-mail samantha.mcclary@eg.co.uk or tweet @samanthamcclary or @EGPropertyNews Photo © Oliver Dixon/Shutterstock