UK June quarter rent collection stabilises

Re-Leased, the cloud-based commercial property management platform, has published its latest figures for the June quarter. The new figures analyse rent collection 21 days after commercial rents were due on June 24.

They reveal that, by July 15, commercial tenants in the UK had paid 57% of rent due, an improvement of +3% compared to day 21 in the March quarter when 54% of rent had been received. On rent day itself, just 18.2% of commercial rents were collected for the June quarter, however this grew to 46% by day 7.

The data also reveals that landlords have issued a record number of credit notes compared to a historical 2-year average.

While retail assets continue to be the poorest performing, all asset types are now reporting stronger rates of rent collection compared to March, with office and industrial properties demonstrating improved resilience.

Tom Wallace, Re-Leased’s CEO, said, ‘The rate of rent collection for the June quarter has been steadily strengthening over the past three weeks and the latest data shows that it has stabilised when compared to the same point in the cycle for March.

‘It is very encouraging to see all asset types are now trending upwards compared to the last quarter.

‘The easing of lockdown has meant more people are spending on the high street and getting back to the office, and this has restored some confidence. However, we must not overlook the fact that landlords have yet to receive almost half of rent due, and this will be causing huge financial strain.’

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 is the best performing region and has also seen the strongest improvement compared to March quarter. The South West is showing the least resilience, while London sits behind the UK average, though it has seen some growth compared to the last quarter.

The fact that landlords have issued a record number of credit notes compared to a historical 2-year average once again illustrates a larger proportion of rent is being forfeited by landlords to ensure tenant longevity.

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.