Re-Leased, the cloud-based commercial property management platform, has published its latest figures for the June Rent Quarter. These new figures analyse rent collection one week after commercial rents were due on the 24th June.
They reveal that, by 1st July, commercial tenants in the UK had paid 46% of rent, up from 18.2% a week ago. However, 54% of rent is still due but with variations across sectors and regions.
Tom Wallace, Re-Leased’s CEO, said “While it’s encouraging to see the rate of rent collection has jumped by nearly 30% in 7 days, commercial tenants have paid less than half of the rent due for this quarter. The level of pressure both tenants and landlords are now under should not be underestimated, especially in the retail sector which remains hardest hit. Continued rent collection for the remainder of the quarter will be challenging, and we continue to encourage transparency between landlord and tenant as outlined in the recently published Code of Practice.”
The data confirms that each sector is responding differently to the crisis. The Retail sector continues to be the hardest hit, while the Industrial sector is proving most resilient and is trending upwards compared to the March quarter. The Office sector has softened by -1% compared to the last quarter.
| Total % of rent collected (as of day 7) | Mar Qtr 2020 | Jun Qtr 2020 |
| UK – all commercial* | 47% | 46% |
| Industrial | 50% | 53% |
| Office | 53% | 52% |
| Retail | 41% | 40% |
*Includes other asset classes with smaller sample sizes (e.g. leisure)
Wallace continued, “As the crisis lengthens and people continue to work from home, the office sector could be the one to watch longer-term. The conversation around the future of the office is only really beginning. Working from home policies and the impact that will have on workspace requirements are yet be fully appreciated”
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 West Midlands is the most resilient region, while the East of England is the least resilient. London ranks 5th and is slightly below the UK average.
| Total % of rent collected (as of day 7) | Mar Qtr 2020 | Jun Qtr 2020 |
| West Midlands | 54% | 61% |
| North East | 50% | 50% |
| East Midlands | 49% | 49% |
| Wales | 45% | 49% |
| London | 44% | 45% |
| South East | 36% | 42% |
| Yorkshire & Humber | 45% | 40% |
| North West | 42% | 35% |
| South West | 37% | 28% |
| East of England | 46% | 25% |
Data for the June quarter also shows that credit notes have doubled, highlighting where tenants have already made agreements for rent free periods.
Wallace concluded, “Both landlords and tenants have had several months to make these arrangements ahead of the quarter date and this data illustrates a larger proportion of rent is being forfeited by landlords to ensure tenant longevity. Interestingly, industrial occupiers were once again the greatest benefactors from these credits with 3.9% of total rent being credited after just 7 days. If momentum continues in a similar fashion to last quarter, we may see a further rise in rent relief offered”.
| Total % of rent received (as of day 7) | Mar Qtr 2020 | Jun Qtr 2020 |
| UK – all commercial* | 1.00% | 2.20% |
| Industrial | 1.50% | 3.90% |
| Retail | 0.50% | 2.40% |
| Office | 0.90% | 1.80% |
*Includes other asset classes with smaller sample sizes (e.g. leisure)
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.