The UK's embattled retail sector is preparing for a general re-opening from 15 June, the date marked by the government for the resumption of most non-essential trading.
Yet as the country's major property owners look forward to closing in on rental arrears as trading resumes, landlord success in rounding up tenant payments has never been more polarised.
New data from property analyst Goodbody reveals that while Supermarket Income REIT is the country's only listed property trust specialising in retail to have collected 100% of its rents for the second quarter, struggling REIT Intu has landed just 29% of its rental payments, at the other end of the spectrum.
Supermarket Income REIT, which only works with strong covenant occupiers equipped for e-commerce trade in the essential retail (grocery) segment, is an equally extreme example in Covid-19 times.
But the Goodbody research reveals that five out of the seven worst 'rent collectors' in the UK property scene are all retail players, and include NewRiver REIT (having collected 60% of Q2 rents), RDI REIT (54%), Capital & Regional (50%), Hammerson (37%) and Intu (29%). British Land, with its mixed commercial portfolio, is reported to have rounded up 68% of rents.
While tenant type has been a key factor for rent collection success, Rob Virdee, analyst with real estate research firm Green Street, told PropertyEU last month that retailers were also eyeing up the health of their creditors.
‘If retailers think that a landlord is going to fail, that they aren’t going to have to nurture a long-term relationship, are they more likely to stop paying?’ he asked. ‘Landlords with firm horizons are in a stronger bargaining position.’
Hammerson draws up re-opening plan
Hammerson, which lost its under-pressure chief executive last week, announced on 1 June that 85% of its UK centres are set to re-open from 15 June, after the REIT successfully re-opened four destinations in France in May (Les Terrasses du Port, Marseille; Nicetoile, Nice; Espace Saint Quentin, Paris; Italie Deux, Paris). The remaining two flagship destinations in Paris, Les 3 Fontaines and O’Parinor, will open on 2 June.
Across Hammerson's outlets portfolio, nine of the 11 Via Outlets schemes are trading, with the first of those re-opening back in April. Three of the Via Outlets schemes have remained open throughout.
Five of the nine European Value Retail Villages are currently trading, with Bicester Village expected to also re-open on 15 June. All of the Value Retail and Via Outlets assets are expected to be open by the middle of the month.
In Ireland, Hammerson said that there would be a phased re-opening of stores, beginning with small retail outlets. By the end of June around 30% of Dundrum is expected to be open, with 40% and 20% at Swords and Illac respectively.
Of Hammerson’s eight retail parks, seven have been open for essential retail during the lockdown period, and all but one of the parks will fully re-open on 15 June.
Mark Bourgeois, UK and Ireland managing director, said: 'It has been a really challenging time for everyone, and we are hugely grateful to the key workers and our centre colleagues that have done so much for us over the past few months.
'What is clear from our re-opening experience in France and across the premium outlets portfolio is that consumers are adjusting to how to shop in this new environment. Sales levels at these destinations have been encouraging to date, although it is still very early days. We are looking forward to re-opening and welcoming back our customers in the coming months.'
Hammerson chief executive David Atkins, who leaves the firm after 10 years, is expected to stay in place until spring 2021 at the latest, with a search for his successor already underway.
