Retail landlords collect just 13.8% of rents for June quarter day - study
Jun 26, 2020
New research shows that just 18.2% of commercial rents in the UK were collected by landlords on 24 June, with retail properties among the worst performing group.
According to Re-Leased, the cloud-based commercial property management platform, retail landlords collected just 13.8% of rent owed compared to 19.8% in the previous quarter.
The figures lay bare the scale of the crisis facing UK property landlords following the lockdown period. On Friday, one of the UK’s largest shopping centre operators Intu warned it may go into administration, throwing the future of 17 large malls into uncertainty.
In fact, commercial property landlords across retail, industrial and office sectors are struggling. Industrial assets, often touted as one of the strongest asset types during the crisis, received 16.2% of rent due. And while office assets proved more resilient, collecting 22.8% of rent due, this was a 31.2% decline compared to March's already-poor figures.
Tom Wallace, Re-Leased CEO, said: “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.”
He added: “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. 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.”
The property management company said the sector will continue to struggle over the next few months. “Vacancy rates, rental values, lease terms are all going to see noticeable shifts over the next six months. 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,” Wallace concluded.
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