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Re-Leased, the cloud-based commercial property management platform, has published its latest figures for the September rent quarter. These new figures analyse rent collection 60 days after commercial rents were due on 29th September.

The figures reveal that commercial tenants in the UK have paid 75% of rent for the final quarter of 2020, a 52.9% increase on the 22.1% collected on due day. The September quarter closes the gap between the 84% of rent which was received at the equivalent period in the December quarter in 2019, and the 67% that came in for the March quarter earlier this year.

Retail properties have seen the strongest rebound for the quarter, with rent collection rising from 12.7% on due date to an encouraging 72%. The sector has also seen a promising uplift when it is compared to day 60 in the two previous quarters at +12% and +13% respectively, however it is still down by -9% on the December quarter.

Talk Property – MPU

Office and industrial assets continue to be the more resilient sectors. At 79%, office properties have seen the rate of rent collection reach a level on par with the December quarter, a clear sign this sector is seeing the sharpest recovery. While the industrial sector has also collected 79% of rent due, it is -11% compared to the levels seen in December.

Total % of rent collected (as of day 60) Dec Qtr 2019 Mar Qtr 2020 Jun Qtr 2020 Sep Qtr 2020
UK ? all commercial* 84% 67% 68% 75%
Retail 84% 59% 60% 72%
Office 81% 74% 76% 79%
Industrial 90% 74% 75% 79%
*Includes other asset classes with smaller sample sizes (commercial, leisure etc)

Tom Wallace, Re-Leased’s CEO, said:

“It is reassuring to see that despite a second lockdown, there are a handful of positives, signalling recovery for landlords.”

“The progress made in the office and industrial sectors offers optimism for the coming year.”

“However, our latest figures highlight that total rent collection in the UK is still some way off the levels we saw prior to the pandemic.”

“Many will end the year with substantial shortfalls and continued concerns over how they will service their debt obligations. Looking forward, all eyes will continue to be on the retail sector.”

Data for the September quarter also reveals that credit notes have continued to rise, highlighting where tenants have already made agreements for rent free periods. At day 60 of the December quarter in 2019, the UK average stood at 1.7%, compared to 5.9% recorded for this quarter.

Total Credited (as of day 60) Dec Qtr 2019 Mar Qtr 2020 Jun Qtr 2020 Sep Qtr 2020
*Average 1.7% 2.7% 4.7% 5.9%
Retail 1.2% 2.8% 4.4% 4.3%
Office 2.3% 1.7% 4.1% 4.4%
Industrial 2.6% 5.3% 7.7% 9.8%
*Includes other asset classes with smaller sample sizes (commercial, leisure etc)

Caleb Dunn, commercial analyst at Re-Leased said:

“The rate of credit notes issued illustrates a larger proportion of rent is being forfeited by landlords to ensure tenant longevity.”

“Earlier in the year, we believed that the volume of rent credited was indicative of the worst-hit sectors.”

“However, as the year has progressed, it now suggests that credits are awarded by landlords in situations where tenant relationships have been, for the most part, transparent and collaborative.”

Behind the overall UK picture, there are significant variations in rent collection across the country. A breakdown of the UK’s 10 regions reveals that the North East has bucked the UK average and received the most rent this quarter at 89%, while the South West has received the least at 62%.

London has emerged as one of the UK’s least resilient regions. In the December quarter pre-pandemic, it received a robust 90% of rent due, compared to the 68% this quarter, and is one of only two regions to receive less than 70%. Yorkshire and Humber is the only region to have received more rent this quarter (+4%) when compared to December.

Total % of rent collected (as of day 60) Dec Qtr 2019 Mar Qtr 2020 Jun Qtr 2020 Sep Qtr 2020
North East** 60% 89% 89%
Wales 89% 81% 77% 84%
West Midlands 91% 75% 82% 81%
East Midlands 88% 63% 68% 78%
East of England 97% 69% 65% 74%
Yorkshire and Humber 70% 66% 61% 74%
South East 80% 62% 67% 73%
North West 75% 65% 55% 72%
London 90% 57% 64% 68%
South West 84% 51% 51% 62%

** Data unavailable

Re-Leased’s analysis is based on live rental collection data from over 10,000 commercial properties and 35,000 leases on its UK platform.

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