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September Commercial Rent Reaches 22.1%

New data has revealed that landlords collected 22.1% of commercial rents this September, making a significant improvement from June’s figures.

According to figures by Re-Leased, the cloud-based commercial property management platform; data compiled from analysing over 10,000 commercial properties and 35,000 leases revealed that commercial property rents were below the 25.3% of March, but 3.9% higher than the 18.2% collected in Junes’ quarter day earlier this year.

Commenting on the results, Tom Wallace, Re-Leased’s CEO, said “To see overall rent collection improve on the last quarter-day is reassuring, especially following the new restrictions for businesses announced by the government last week and the recent extension of the rent moratorium.

“While there remains uncertainty in the market over rising coronavirus cases and the possibility of further restrictions, initial signs suggest the rent collection curve over the next 60 days will be on par with March and June.”

Total % of rent collected March Qtr 2020 June Qtr 2020 Sept Qtr 2020
All Commercial* 25.3% 18.2% 22.1%
Retail 19.8% 13.8% 12.7%
Office 31.2%% 22.8% 31.8%
Industrial 23.0% 16.2% 18.3%

As shown above, while many commercial rents outperformed their June figures, retail properties continued to struggle.

Tom continues: “These figures will, however, be very concerning for retail landlords with rent receipts continuing to decline. Retailers are trading in the toughest of circumstances but those who are well-capitalised and can pay some or part of their rent should. Landlords now face huge financial pressure on meeting their own debt obligations.”

Re-Leased has also compiled a breakdown of the total percentage of rent collected across various parts of the UK, demonstrating which areas landlords had the most success in collecting their rent.

As outlined in the table below, the West Midlands had the most substantial collection percentage last month (34.60%).In comparison, London barely exceeded the 20% threshold, falling below the national average and far below the regions previous return in June.

Caleb Dunn, Commercial Analyst at Re-Leased, concludes: “The general theme of improvement in rent collection that we have seen this quarter is testament to the ongoing efforts by landlords and agents to sustain relationships with their occupiers during a volatile period. As a large number of businesses confirm their long-term back to work plans, a greater degree of certainty is reflected in the boost of office rent collections.”

Total % of rent collected March Qtr 2020 June Qtr 2020 Sept Qtr 2020
West Midlands 29.00% 22.60% 34.60%
East of England 30.40% 13.30% 26.00%
Wales 16.40%% 14.40% 24.70%
East Midlands 25.90% 17.80% 23.40%
London 21.10% 25.30% 20.20%
Yorkshire and Humber 23.00% 17.70% 20.10%
South East 26.90% 24.80% 19.80%
North West 26.00% 19.40% 18.80%
South West 19.40% 15.20% 17.10%
North East 36.30% 19.20% 13.40%

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