Remit Consulting sees an increase in rent collection rates seven days after the June Quarter due date
- Rent collection stands at 75.5% on 7 days past the June due date, up from 68.8% on the due date
- Offices record the highest rent collection at 7 days of all the sectors, at 80.6%
- Retail rent collection is up from 69.7% at the due date to 79.6% at 7 days
- Overall collection rates remain about 15% below pre-pandemic levels
The collection rate of rent for commercial property, seven days after the June quarter day due date, reached a national average of 75.5%, an increase of 6.7% over the seven-day period and the highest comparable collection rate witnessed so far during the pandemic, according to the latest research from Remit Consulting.
The collection rates were 1% below those at the same point of the March Quarter (2022).
By comparison, seven days after the June Quarter Day due date in June 2020, the collection of rent for commercial property was just 50.7%. In 2021, the figure stood at 66.5%.
“Overall, collection figures are still around 15% lower than was typically experienced at this stage of the quarterly collection periods before the pandemic,” said Laura Andrews of Remit Consulting.
“Over the duration of the March quarter of this year, there was a shortfall in rents collected of 4.4%. While this was by far the best quarterly period of the pandemic, this figure represents a significant deficit in the income of many landlords, including pension funds and other financial institutions.”
“The uplift of collection figures is certainly welcome news for the landlords and investors who have seen a substantial shortfall in income during the pandemic. However, with the cost-of-living crisis, a reduction in consumer spending is a real possibility, which could translate into reduced rent collection, particularly with businesses that are reliant on disposable incomes in the leisure and retail sectors,” she added.
The latest REMark Report from Remit Consulting shows that, after seven days of the June Quarter, the overall collection of retail rent rose from 69.7% on the June Quarter due date, to 79.6% after seven days. At 80.6%, offices saw the highest rent collection of all the sectors after seven days.
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.