The shortfall in rent that should have been paid by occupiers of commercial property in the UK during the pandemic is projected to reach over £8.0 billion by the end of March, according to the latest research from Remit Consulting. The March Quarter Day (25th), when payments of rent are due to be paid for the next three months, also marks the end of the Government’s moratorium on the eviction of business occupiers for non-payment of rent.
Remit Consulting’s ongoing study into the volume of rent and service charge payments paid by occupiers of commercial property, suggests that investors can expect a total shortfall over the three months of the December Quarter of around £5.4 million. This means that, by the start of the March Quarter, the total shortfall in rents since the start of the pandemic is likely to have reached over £8.0 billion.
Laura Andrews of Remit Consulting said, “Over the past two years, property investors, including many pension funds and other institutions, have experienced a shortfall in the rent payments they receive each quarter. Despite the gradual improvement in the figures over the whole of the pandemic, many business occupiers are still in arrears and a further shortfall, across all commercial property asset classes, of around 6-7% has to be expected by the end of the current quarter.”
While the end of the Government’s moratorium on eviction of business occupiers for non-payment of rent could provide greater clarity for landlords and property managers, resolving outstanding debts will not be straightforward and the financial legacy of the pandemic will continue to be an issue for the property sector for several years,” she added.
Remit Consulting has, since the start of the Covid-19 pandemic, worked in conjunction with the British Property Federation (BPF), the RICS, Revo, the Agent's Advisory Group, 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.