- Huw Hughes |
Just 13.8 percent of retail property rents were paid for this week’s quarter rent day, new data reveals.
That compares to 19.8 percent paid for the previous quarter rent day in March and again highlights the extent to which the fallout from Covid-19 is affecting the sector.
Retail was the most heavily impacted sector, compared to industrial (16.2 percent of rents paid), and offices (22.8 percent). Overall, just 18.2 percent of commercial rents in the UK were collected by landlords on 24 June, compared to 25.3 percent in March.
That’s according to analysis by cloud-based commercial property management platform Re-Leased of 35,000 commercial leases.
Re-Leased CEO Tom Wallace said the figures were “sobering” but “not as catastrophic as some were forecasting” and said he expects rent collection to steadily increase in the coming weeks.
Pressure for both landlords and tenants
“For months, the industry has been speculating what the real impact of coronavirus will be on the UK’s property market. June quarter gives us the first real indicator of the severity of the crisis and quantifies the pressure both landlords and tenants are under,” Wallace said in a statement. “We continue to encourage landlords to work as closely as they can with their tenants to understand what payments may or may not be possible for June but also the remainder of the year.”
He continued: “Across all sectors, we have already seen landlords offering rent holidays, deferrals, and reductions where possible which is encouraging, but transparency is key. It’s crucial to remember that like tenants, landlords will be experiencing significant cash flow problems and have their own financial obligations to meet.”
For the next six months, Wallace warned of “more pressure to come” with “noticeable shifts” in vacancy rates, rent values and lease terms. “The temporary ban on evictions for non-payment of rent and the government furlough scheme is providing a lifeline to many tenants at the moment, but those measures will not last forever,” he said.
Photo credit: FashionUnited