The latest rent collection figures for the September 2021 quarter have been published by Re-Leased, the cloud based commercial property management platform. The September quarter commercial rent rates are now at their highest level since before the coronavirus pandemic.
Day 60 September quarter commercial rent collection
The new figures for commercial rent collection rates in the UK show how much has been received by landlords at the 60-day mark for the September quarter. Overall, rent collection at this point was 76%. This is the highest level seen at this point of a quarter since before the first lockdown. At the height of the Covid-19 pandemic just 67% of all commercial rent had been collected by day 60.
Retail sector sees increase in collection rates
There has been a significant increase across all sectors of the economy since the June quarter. The retail sector, which has been the hardest hit by the lockdowns, saw a promising rise from the previous quarter. Rent collection rates in the industry for day 60 increased by 7% to 73%.
This is just below the national average and is a large rise from the low of 59% which was received by day 60 for the March 2020 quarter. Due to the significant impact on the industry, retail rent collection rates have been slower to recover than other sectors. However, this jump for the September quarter shows that recovery is now on track and moving towards pre-pandemic levels.
The highest level of September quarter commercial rent collection was received by landlords in the industrial market, where 80% of all rent had been paid by day 60. This was an increase from 77% for the previous quarter. For the office sector, 77% of rent had been received by this point, compared with 74% for the June quarter.
Sam Caulton, CFO of Re-Leased, said: “Rent collection data continues to provide valuable insight into performance across commercial property sectors. These latest national figures are really encouraging, particularly for retail which is now beginning to catch up with other real estate sectors after a difficult 18 months. We can expect this upwards trend to continue into the next quarter as we see the effects of a return to Christmas shopping in person.
“As the country recovers from the pandemic, the industrial sector is proving vital to economic growth, which will be welcome news for landlords. Not only are rents surging as demand for space grows, but rent is being paid in full and on time across much of the sector.”
Regional rent collection data shows positive growth
The data from Re-Leased also shows there has been recovery across many of the regions. By the 60-day mark for the current quarter, the East of England and the North East had seen the highest increases (from 58% to 83% and 48% to 84% respectively compared to the same point for June).
London saw the lowest level of rent collection, with just 60% received by landlords as of day 60. However, this was still an increase from the low of 56% collected at the same point in the last quarter.
The commercial rent collection analysis from Re-Leased is based on live data from over 10,000 commercial properties and 35,000 leases in the UK.
Coronavirus and commercial rent collection
Commercial tenants have protection from eviction until 25th March 2022 under the coronavirus legislation. There are also restrictions on the use of the Commercial Rent Arrears Recovery (CRAR) process.
The Commercial Rent (Coronavirus) Bill is currently going through Parliament and will establish a legally-binding arbitration process for commercial landlords and tenants who have not reached an agreement on rent arrears.