Initial rent collection for September quarter day reaches 22.1%

Re-Leased, the cloud-based commercial property management platform, has revealed that landlords collected 22.1% of commercial rents due on 29th September, this quarters’ rent day, marking a positive improvement on the June quarter day.

Yesterday’s initial figure compares with the 25.3% and 18.2% of rent that was collected on the March and June quarter days, respectively. The rent collection curve improved considerably for both previous quarters, with around two-thirds of rent collected 60-days after due date.

Retail properties continue to be the hardest hit and collected just 12.7% of rents due, down on the 13.8% that was collected on June quarter day. Retail was the only sector to see rent collection decrease on the previous quarter, with offices and industrial assets both seeing improvement.

Re-Leased’s analysis is based on live rental collection data from over 10,000 commercial properties and 35,000 leases on its UK platform.

*Includes other asset classes with smaller sample sizes (e.g. leisure)

Tom Wallace, Re-Leased’s CEO, said “To see overall rent collection improve on the last quarter day is reassuring, especially following the new restrictions for businesses announced by the government last week and the recent extension of the rent moratorium. While there remains uncertainty in the market over rising coronavirus cases and the possibility of further restrictions, initial signs suggest the rent collection curve over the next 60 days will be on par with March and June.”

“These figures will however be very concerning for retail landlords with rent receipts continuing to decline. Retailers are trading in the toughest of circumstances but those who are well-capitalised and can pay some or part of their rent should. Landlords now face huge financial pressure on meeting their own debt obligations.”

The British Property Federation estimates total rent unpaid for UK commercial property between late March and the end of December will be around £4.5 billion.

Caleb Dunn, commercial analyst at Re-Leased, said: “The general theme of improvement in rent collection that we have seen this quarter is testament to the ongoing efforts by landlords and agents to sustain relationships with their occupiers during a volatile period. As a large number of businesses confirm their long-term back to work plans, a greater degree of certainty is reflected in the boost of office rent collections.”

Behind the national picture, there are significant variations in rent collection across the country. A breakdown of the UK’s 10 regions reveals the West Midlands is the most resilient region, while the North East is the least resilient. London ranks 5th, collecting 20.2% of rent, slightly below the UK average.