UK retail rent collection fails to improve, new research shows

rent collection
Commercial property tenants had paid 70% of rent due for the March quarter by May 24
// UK retail rent collection has failed to improve since non-essential reopenings in April
// Rent collection for retail reached 67% on May 24
// Retail properties were hardest hit during lockdown out of three types: retail, office and industrial

New research has found that UK retail rent collection has failed to improve despite the easing of Covid-19 restrictions.

Commercial property management platform Re-Leased has revealed its latest rent collection data, covering the amount of commercial rent collected up to May 24.

Rent collection for retail reached 67 per cent on May 24 – eight percentage points less than the equivalent period last year.

READ MORE: Trade bodies urge govt to cover 50% of rents to keep businesses afloat

Non-essential retail had been closed from January 5 until April 12 in England and Wales, while in Scotland, non-essential retail reopened on April 26, and opened in Northern Ireland on April 30.

Retail properties were the hardest hit out of the three types: retail, office and industrial.

Commercial property tenants had paid 70 per cent of rent due for the March quarter by May 24.

Although this reflects a rise of 49 per cent on the proportion of rent collected on March 25, it remains lower than the equivalent period in the preceding two quarters.

By day 60 in the December quarter, 74 per cent of rent had been collected, while on the equivalent day in the September quarter, 75 per cent of rent had been paid.

“While last week indoor hospitality reopened across England and Wales on 17 May and brought the biggest step so far in the UK’s roadmap out of Covid restrictions, this progress has not yet been reflected in rental yields,” Re-Leased analyst Caleb Dunn said.

“Tenants continue to feel the pressure of 15 months of disruption, and confidence and financial stability remains uncertain.

“There are, however, some promising signals the economy is responding to both the vaccine programme and non-essential retail opening back up.

“Retail sales in April surged by almost 10 per cent and there were encouraging signs from the FTSE 100 last week.

“It is important to remember restrictions only started to ease six weeks ago, and a rebound in rent collection will take some time to come through.

“As we reach the final step in the roadmap next month and the economy continues to grow, we look forward to seeing the outcomes of the government’s recent consultation on commercial rents.

“It is crucial effective solutions are brought forward that help both landlords and tenants successfully manage the recovery from the pandemic.”

In March last year, the government issued a moratorium to prevent property evictions during the pandemic in an effort to support businesses that were forced to close their stores.

The ban is due to end on June 30.

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