The latest figures show that at the 60 day mark, 74% of all commercial rent in the UK for the first quarter of 2021 had been paid. This is a fall of just 1% on the figures for the previous quarter (September 2020). However, compared with the year on year data it is a decrease of 10% for the same point in the rent cycle.
60 day commercial rent collection figures
The Covid 19 Rent Collection Impact Report from Re-Leased / CREDIA, analyses the collection figures at the 60 day mark for rent due on 25th December 2020. The data is collected from over 10,000 properties and 35,000 leases in the UK.
It shows that across all commercial properties in the UK, nearly three quarters (74%) of the rent had been paid by this point. This compares with 75% paid by day 60 for the September 2020 quarter and 67% for March 2020.
Rent collection rates for the first quarter have been steadily increasing since the due date. The figures reveal that 27% of all rent was paid on the due date, rising to 40% by day seven. The day 14 and day 21 figures were 55% and 60% respectively.
Industrial sector performing strongest
Throughout the coronavirus pandemic, the industrial sector has proved to be the most resilient. For the first quarter this pattern continued, with 81% of rent being paid by the 60 day point. This is an increase from the 79% and 75% collected by day 60 for the September and June quarters respectively. However, it is still a 9% decrease from the same point in the December 2019 quarter.
In comparison, the retail market remains the hardest hit, with many businesses remaining shut in the latest lockdown. The previous quarter had seen a rebound; with 72% of rent paid by day 60, compared with 60% at the same point for the June 2020 quarter. However, for December just 68% of retail rent had been paid by the 60 day mark.
In the office market there was a slight decline in the amount of rent paid by day 60; with 77% of rent collected at this point for December, compared with 79% for the September quarter. However, out of all the commercial markets this sector is the closest to pre-pandemic levels, with only a 3% fall in comparison to the December 2019 quarter.
Regional variations in commercial rent
For the December 2020 quarter, the West Midlands saw the best performance. Here 87% of all commercial rent was collected by day 60, which was an 8% rise compared to the previous quarter. The highest increase from the September quarter was seen in the East of England, which had a 12% increase in rent collection for December 2020.
The hardest hit region of England was the South West, where just over half of the rent (53%) had been collected by day 60 for the December quarter. For the previous two quarters, only 59% (September) and 50% (June) was collected by the same point.
Pandemic has hit commercial landlords hard
The government has provided a substantial amount of support for businesses during the coronavirus pandemic. This includes a moratorium on lease forfeitures for rent arrears and large restrictions on the use of the Commercial Rent Arrears Recovery (CRAR) process. These are currently in place until 31st March 2021.
However, in some cases commercial landlords have gone a whole year with little or no rent.
Tom Wallace, CEO and Founder of Re-Leased, commented: “We are fast approaching the one-year point of the pandemic and our latest figures highlight that UK wide rent collection is still some way behind levels we were seeing a year ago.
“Many landlords will have started the year with substantial rental shortfalls and debt obligations, which have now been compounded across four consecutive quarters. The UK may be starting on its roadmap to more normalcy, but the impact of the pandemic on landlords has not been fully appreciated by government and with the moratorium looking likely to be extended this could present another blow.”
More information:
Commercial rent collection rates vary in December
Government extends ban on commercial property evictions
Almost three quarters of commercial rent paid since September Quarter day