Commercial rent collection ‘exceeds expectations’ in June
The amount of commercial rent collected in June “exceeded expectations” in the wake of the coronavirus crisis, the latest data showed.
Real estate services company Cushman & Wakefield said it collected 69.1 per cent of rent in June on behalf of its clients, compared to 69.5 per cent collected in March just after the UK went into lockdown.
The result “far exceeds initial expectations”, the firm said.
The office sector led the way, with 81 per cent of rent collected in June, up four percentage points compared to March.
In the industrial sector, June rent collection stood at 70 per cent compared to 72 per cent at the same point in March.
However, just 45 per cent of rent was paid by struggling retail tenants compared to 52 per cent in March, despite the reopening of non-essential stores.
Around a third of companies have sought help from landlords since the Covid-19 epidemic took hold by way of rent holiday, concession or renegotiation, Cushman & Wakefield estimated.
Cushman & Wakefield head of UK asset services Nick Ridley said: “The latest numbers still show a significant impact from the Covid-19 pandemic, but are holding up better than initial expectations, and we feel we can see real signs of recovery starting to take hold.
“There is a significant variance by sector when it comes to rent collections and these reflect the struggles that have been caused by the pandemic, with retail and leisure taking a significant proportion of the brunt.
“Our view is that we have seen the worst of the decline in terms of commercial tenant rent payments, and we would now like to see incremental improvements in rent collections as the economy slowly starts to reopen and consumers and businesses become more confident and start to navigate this ‘new normal’