Highest UK rent collection level for commercial property landlords since start of pandemic

The amount of rent commercial property landlords have collected from tenants has reached its highest level so far in the pandemic, as lockdown rules easing boosted businesses.

According to Remit Consulting, an average of 72.1% of rents due in the UK had been collected with seven days of the September quarter rent day, which covers payments for the three months ahead.

The total paid for space at properties including shops, bars, restaurants and warehouses, compares to 66.5% that had been collected at the same point in the previous quarter.

In total 68.8% of retail rents were collected seven days after the September quarter day, compared to 62.3% at the same stage of the June quarter. For leisure sites, 57.2% was collected, up from 40.1%.

There was tension between many landlords and business occupiers during the virus crisis, and many firms said they could not pay when lockdowns forced them to temporarily close sites.

But in certain cases building owners argued some firms refusing to pay were big, profitable ones taking advantage of a moratorium on business evictions that was introduced to help struggling tenants.

Lockdowns have eased during 2021 with the hospitality sector able to start welcoming customers back from April, and non-essential retailers now open.

Steph Yates at Remit Consulting said: "The first seven days of the current quarter saw a rapid increase in the collection of rents and service charge payments, which is good news for investors and landlords such as pension funds and other institutions, particularly as the upward trajectory of payments from tenants is similar to the previous quarters of the pandemic.”

Yates added: “However, this quarter, the collection rates are on average, around six percentage points higher than the previous quarter, which was, in turn, the best three-month period of the pandemic so far.”

But overall collection rates for both rents and service charge payments are still significantly lower than the firm recorded pre-Covid.

The data came on the same day that property giant Landsec said its rent collection rates continue to improve.

As at October 12, collection day 10 - 85% of the net rent due on September 29 had been paid. That compares with 81% for the June quarter date.

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