REMark
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Issue 324 : Jan 2025

REMark

Commercial property rent collections at highest level achieved for any quarter during there pandemic so far

The collection of commercial property rents, seven days after the June Quarter due date, have reached the highest level achieved for any quarter during the pandemic so far, according to the latest REMark Report, published by Remit Consulting. Remit’s figures for the June Quarter Day, which are verified by the UK’s major managing agents, reveal that, overall, an average of 66.5 per cent of rents due from tenants of commercial property were collected by property managers and landlords. This compares to a figure of 60.5 per cent collected seven days after the start of the previous Quarter. The previous highest collection rate, a week after the due date, was 62 per cent, which was collected in the September Quarter. By comparison, the equivalent figure from 12 months ago was 50.7 per cent. The latest REMark Report also reveals that, overall, 62.3 per cent of retail rents were collected within seven days of the due date, with 61.2 per cent of rents due from shopping centre occupiers collected, and 54.7 per cent of rents collected from ‘high street’ retail tenants. The best performing retail asset class was retail warehousing, where nearly 75 per cent of rents were collected within seven days of the due date. There was a dramatic increase in the amount of rent collected from pubs, bars and restaurants, where, on due date, only 5.4 per cent of rents were paid. This rose to 27.1 per cent after seven days. Steph Yates of Remit Consulting says: “While these figures on rent collection are still a long way short of what was experienced pre-pandemic, they are the most positive we have seen seven days following the due date. “The overall collection rate is closer to the 21-day collection rates for both March this year and the September Quarter of 2020. It should also be remembered that in the June Quarter of 2020, overall collection rates had only reached 72.5 per cent by the end of the 90-day period.” According to Remit Consulting, since the start of the pandemic in March 2020, investors and property owners, which include many pension funds and other institutions, have seen a shortfall in the rent they have received from commercial occupiers of GBP6.4 billion, equating to approximately GBP1 in every GBP6 of rent due going unpaid. During the pandemic, Remit Consulting has worked in conjunction with the British Property Federation (BPF), the RICS, Revo, the Property Advisors Forum, 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. The research covers around 125,000 leases on 31,500 prime commercial property investment properties across the country.

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