22nd July 2021
73.9% of the rents due from commercial tenants received within 21 days of the June Quarter day
Good news from the High Street as 69.6% of retail property rents were paid within 21 days of the due date
The collection of rent from commercial property tenants has, 21 days after the June quarter due date, continued to reach the highest level achieved at the same point of any financial quarter of the pandemic so far, according to the latest figures published by Remit Consulting.
The figures released from the firm’s REMark Report, which are verified by the country's major managing agents show that overall, an average of 73.9% of the rents due from commercial tenants were paid within 21 days of the due date. This compares to 67.3% collected at the same point in the previous quarter and 59.2% recorded 12 months previously.
The sector that experienced the largest increase in rent collection compared to the March Quarter 2021, was the retail sector, where rent collection reached 69.6% compared to 57.8% at the same point three months ago. By comparison, 21 days after the June quarter day in 2020, just 47.7% of retail rents had been collected.
The leisure sector has also seen a marked improvement in the current quarter, and after 21 days, 49.5% of rents have been collected. In the March quarter, the equivalent figure stood at 38.4%.
Steph Yates, a senior consultant at Remit Consulting, said: "This is clearly good news, and it would appear that we are on course for the highest total of quarterly payments recorded so far during the pandemic. The improvement seen by the retail and leisure sectors will be particularly welcomed by investors and is a reflection of the relaxation of many of the Covid-19 restrictions over recent weeks. Indeed the latest news reflects this sentiment, with some landlords announcing that demand for rent concessions has dropped and that they aren’t expecting to be granting any more concessions over the course of the next quarter.
“However, it is clear that a significant number of tenants are still unable, or unwilling to make the payments that they owe and while the Government’s moratorium on evictions of business tenants for non-payment of rent continues, we expect that the shortfall in income experienced by investors will increase further.”
Remit Consulting calculates that, since the start of the pandemic in March 2020, investors and property owners, including many pension funds and other institutions, have experienced a shortfall in the rent they have received from commercial occupiers of £6.4 billion, equating to approximately £1 in every £6 of rent due going unpaid.
The latest REMark Report also reveals that the payment of Service Charges by tenants increased marginally and, overall, 66.8% was paid by businesses within 21 days of the due date. This compares to 64.7% received 21 days after the March Quarter day.
During the pandemic, Remit Consulting has worked in conjunction with the British Property Federation (BPF), the RICS, Revo, the Property Advisors Forum, and other members of the Property Industry Alliance (PIA), analysing the collection of rent and service charge payments by the country's largest property management firms. The research covers around 125,000 leases on 31,500 prime commercial property investment properties across the country.
