UK landlords raised 21% of commercial rentals this quarter.
Leased properties have seen a positive boom.
Cloud-based commercial property management platform Re-Leased has revealed that landlords collected 21% of commercial rents in the UK on March 25, this quarter’s rental date.
This marks a decline in the previous two quarters, suggesting that the third national lockdown has caused the rental collection rate to weaken after seeing positive growth late last year when restrictions were lighter.
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.
“Although we are far from the goal, the future is hopeful.”
Tom Wallace, CEO of Re-Leased, said: “The past year has tested the resilience of the commercial real estate industry like no other. It is clear from our latest figures that, one year later, we are far from “back to normal”, with rent collection still below pre-pandemic levels.”
“The burden of three national closures and other social restrictions has put substantial pressure on occupants and owners, many of whom are now facing dire financial circumstances. The debt pile continues to grow into the billions and the five-quarter compounding effect of the rental deficit should not be underestimated.”
Caleb Dunn, Re-Leased Business Analyst, said: “Performance in rent collection continues to be a valuable barometer for business and occupant performance in the UK.”
The level of rent charged this quarter is a direct response to the third shutdown, which has once again seen businesses respond to the toughest restrictions. The last time the UK faced these levels of restrictions was during the first national shutdown, prompting a record low rent collection for the June quarter.
“So it is promising to see that while this quarter’s figures are actually lower than the previous one, they are up + 3% compared to June. This shows that resilience has improved and shows that owners and occupants are better prepared to deal with the implications of a lockdown compared to a year ago.”
“As we continue to open up the economy in the coming months, there are many reasons to expect a rebound for the June quarter. However, despite some cause for optimism, heading into the end of the year, we expect there will be more pressure with vacancy rates, rental values , and lease terms, all set to see notable changes.”
Behind the bigger picture of the UK, each sector is responding differently to the crisis. Retail trade continues to be the most affected; the sector has registered the lowest collection rate this quarter with 15%. Offices recorded the strongest rental collection rate at 28%, yet this sector has slowed compared to the previous two quarters. The industrial sector has emerged as the most resistant sector and is the only one to see an increase in the levels registered a year ago, by + 3%.
Behind the bigger picture of the UK, there are also significant variations in rent collection across the country. A breakdown of the UK’s 10 regions revealed that the East Midlands is the most resilient region this quarter, while the South West is the least resilient.
HICH LTD has revolutionized the property survey market since day one! Are you looking for a roof, structural, or bespoke survey? Request it here!
Follow us on our social networks to keep up to date with the most relevant property market news, tips for being a responsible homeowner, and much more!
Twitter: @HichLTD
Facebook: HICH-LTD
