Rent collection remains steady amid Omicron uncertainty

Commercial property rent collection has improved on the previous quarter in the face of tightening government restrictions as the Omicron coronavirus variant took hold, according to the latest research. Statistics from Remit Consulting covering some 125,000 leases, shared exclusively with EG, show that 62.7% of rents were paid by tenants on the 25 December rent date. The total rose to 71.8% within seven days. This compared with 57.4% collection on September’s quarter day, rising to 72.1% at the seven-day mark. Retail stays resilient Collection rates for retail properties reached 62.3% on the December due date, rising to 70.1% within seven days. This compares with 59.8% and 68.8% respectively, three months earlier. Pub, bar and restaurant owners received 52.4% of rents owed at Christmas, growing to 61.4% a week later. The figures for leisure stood at 34.3% and 57.2% respectively at the same points in the previous quarter. Industrial nudges down While collection for offices inched up to 70.7% on the December quarter day, from 69.8% at the same point in September, its 79.1% rate at the seven-day mark was lower than the previous quarter’s equivalent of 82.5%. Notably, industrial performance in December dipped slightly to 61.1% at Christmas, from 62.3% on September’s rent day. Landlords in the sector received 69.5% of rents due a week later, down on 73.4% at the seven-day point in September. A £7.4bn pandemic shortfall By the end of the September deadline, 93% of all rents owed was collected by investors and property managers. Remit noted that, while this was the highest end-of-quarter result so far during the pandemic, it reflected a shortfall of more than £489m for the three-month timeframe. Since the start of the pandemic, property owners have suffered a £7.4bn total shortfall in rents received from occupiers. Steph Yates, senior consultant at Remit Consulting, said: “As the Omicron variant was first detected in the UK in late November, and it was not until mid-December that the government introduced restrictions such as the work from home guidance, the tougher guidance will have had a negligible effect on the previous quarter’s figures. “However, there were concerns regarding the possible impact upon collection rates for the December quarter day, which seem to have been unfounded, with collection rates higher on the due date than for any previous quarter during the pandemic so far.” Melanie Leech, chief executive of the British Property Federation, said: “The data for Q4 suggests rent collection is stabilising as property owners and occupiers continue to reach agreements that will enable them to navigate the next phase of the pandemic, while also working together to resolve any outstanding arrears to avoid the need for arbitration or other legal process and ensure a smooth transition back to normal trading conditions.” To send feedback, e-mail pui-guan.man@eg.co.uk or tweet @PuiGuanM or @EGPropertyNews Photo © Oliver Dixon/Shutterstock