Twenty-one days after the September Quarter Day due date, the collection of commercial property rents in the UK reached the highest level seen during the pandemic, according to the latest research from Remit Consulting.
The figures for the collection of rent and service charges reveal that overall, an average of 81.9% of rents owed by tenants of commercial property, were collected within 21 days of the due date.
“It is a positive sign that we have reached this level within 21-days of the start of the Quarter and the current position is far better than for the same time last year when only 79.1% of rents were collected over the full 90-days of the September Quarter 2020,” said Steph Yates, a senior consultant with the firm.
The research shows a significant improvement in the rate of collection for the June 2021 Quarter, when only 73.9% had been paid by tenants after 21 days.
Office occupiers are, once again, proving to be the most reliable payers, with 90.4% of office rents having been paid. The industrial sector is revealed to be the next best asset class, with 83.7% of rents paid within 21-days, followed by retail (75.4%) and leisure properties (74.0%).
“While the figures will be welcomed by investors, there is still the question of the total shortfall of rent payments by business occupiers during the pandemic, which total just under £7 billion. The Government has said that the moratorium on evictions for non-payment of rents will end next March, but there is still a great deal of uncertainty as to how the situation will play out,” added Yates.
“We are not yet out of the woods and the sharp rise in infections, hospitalisations and Covid-related deaths recorded in recent weeks may have a detrimental impact on the ability of businesses to pay their rent and service charges.”
Since the start of the pandemic, Remit Consulting has been working 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.
