Commercial rent collections buoyed by September’s short-lived return to offices
Commercial rent collections started to recover in the third quarter due to the reopening of non-essential retail, offices and schools after lockdown.
Real estate services firm Cushman & Wakefield said today that it had collected 77 per cent of rents owed to its clients on the 21st day after the third quarter due date.
The figure is up nine percentage points compared to the second quarter figure, when just 68 per cent of commercial rents had been paid.
Cushman & Wakefield said commercial rent collection had been boosted by the reopening of non-essential stores in June, the Eat Out to Help Out scheme in August and the return to work in September.
However, the figures are still down compared to December 2019’s rent collection levels which stood at 95 per cent at the Day 21 point.
The government’s advice on returning to offices has since changed amid concerns over a second spike of coronavirus, with employees told to continue working from home where possible.
The U-turn could dent the sector’s recovery going forward, experts warned.
For the third quarter, the highest proportion of rent received was from office tenants who paid 87 per cent, followed by industrial rents which reached 77 per cent.
Retail rent collections were significantly lower than other sectors, but rose 12 percentage points from 45 per cent in June to 57 per cent in September.
Cushman & Wakefield head of UK asset services Nick Ridley said: “We can see clearly in our latest data that rent collection levels for the September quarter have been positively impacted by the reopening of non-essential retail and return to the workplace, all of which have increased consumer confidence and footfall.
“The return to work messaging in August was medicine for the offices sector, which is reflected in the quarterly spike in rent collection levels. However, we might see this momentum slow as the advice has switched to working from home.
“Industrial is doing well, which includes logistics and warehousing, vital to the current appetite for online ordering – rent collections for tenants in this sector are set to continue on a trajectory of recovery for the rest of the year.”