London office rent collection struggles as regional cities bounce back
London office landlords have struggled with rent collection in the second quarter, according to new data, while those in Manchester and Birmingham have bounced back.
Three weeks on from rent collection day, data company Re-Leased’s rent analysis showed just 52% of June quarter rents in London had been collected at day 21, the lowest figure at this point in the quarter since the beginning of the Covid-19 pandemic.
London’s office sector has been hit hard by people working from home, with the latest figures showing rent collection in the capital faring worse than Birmingham and Manchester.
London office landlords have struggled with rent collection in the second quarter, according to new data, while those in Manchester and Birmingham have bounced back.
Three weeks on from rent collection day, data company Re-Leased’s rent analysis showed just 52% of June quarter rents in London had been collected at day 21, the lowest figure at this point in the quarter since the beginning of the Covid-19 pandemic.
London’s office sector has been hit hard by people working from home, with the latest figures showing rent collection in the capital faring worse than Birmingham and Manchester.
Birmingham saw rents paid surpass pre-pandemic levels at 89% for the June quarter this year, while in Manchester, office rent collections for the same period were at 69%, up from 59% at the same point last quarter.
While London office rent collection remains subdued, there are some early signs of returning confidence in the capital elsewhere. The data also showed that potential vacancy risk – meaning the percentage of rent from leases that have ended and are being paid on a rolling basis, with tenants able to leave without any notice – is lower in London, at 9.4% of leases, compared to 24.1% in Birmingham and 15.3% in Manchester.
Caleb Dunn, commercial analyst at Re-Leased, said: “Rent collection performance continues to shine a light on the state of the commercial office sector.
“The level of rent collected for the June quarter so far shows the lasting impact of the third lockdown, and suggests that the effects of remote working are still very much being felt in London’s offices.
“The capital is lagging behind its rival cities in the regions, and landlords will be feeling the strain after more than a year of restrictions on office working.”
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