Remit Consulting reports a further shortfall in the collection of commercial property rents

• Collection rates remain around 12% below pre-pandemic levels
• 87.2% of rents were collected, 35-days after the due date

Thirty-five days after the March Quarter Day, the collection of rent on commercial properties remains around 12% below those experienced pre-pandemic, according to the latest research from Remit Consulting.

The management consultancy reports that 35-days after the due date, an average of 87.2% of the rent from occupiers of commercial property in the UK had been paid to their landlords.

While the current quarter continues to see the highest rent collection rates for commercial properties so far in the pandemic, they remain around 12% lower than those recorded at the same stage in the March Quarter of 2019, and only 3.9% above the figure recorded after 35-days of the previous quarter.

“While rent payments are the highest that we have recorded after 35-days, we remain on a similar trajectory to previous quarters during the pandemic and, at just over 87%, the collection rates remain significantly below that witnessed pre-Covid,” said Steph Yates of Remit Consulting.

“The end of the government's moratorium on the eviction of tenants for non-payment of rent due to Covid-19 coincided with the start of the current quarter, and many landlords were optimistic that this would see a substantial uplift in rent collection levels. However, with arbitration now an option for tenants, it appears that the market is still some way from returning to pre-pandemic levels.

“The trajectory suggests that investors can expect a further shortfall in their incomes at the end of the 90-day period,” she added.

After 35-days of the current financial quarter, rent collection rates for retail properties stood at 88.4%, an increase of almost 5% compared to the same stage of the previous quarter (83.2%). Overall rent collection for leisure properties (hotels, pubs, restaurants, etc,) reached 87.6% after 35-days, compared to 79.5% three months previously. Offices remained the best performing commercial property sector, with a collection rate of 92.3%.

Remit Consulting has been analysing the collection of rent and service charge payments by the country's largest property management firms since March 2020, 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). The research covers around 125,000 leases on 31,500 prime commercial property investment properties across the country.