Only 49.7% of rent due in the UK had been collected 10 days after the March quarter date, according to the new Covid-19 Rent Collection Impact Report published by Re-Leased, the cloud-based commercial property management platform.
This contrasts to a collection average of 69.7% from the last two years on a like-for-like basis, representing an overall decline of -28.7%.
Tom Wallace, CEO of Re-Leased, said ‘Covid-19 has impacted the UK property market quickly and deeply with landlords experiencing a significant curtailment in the collection of rent for the March quarter.
'Our analysis reveals just how considerable the challenges will be for landlords, many of who own or manage small portfolios, family trusts or charities for example, and won’t benefit from the security some of the bigger operators can depend on in the weeks and months ahead.’
Re-Leased’s report shows there is however notable cash collection variance across asset classes. Comparing rental collection 10 days after the March quarter date to its two-year average, office assets have proved most resilient with an overall decline of -8.23%, with industrial assets at -23.5% and retail at -35.9% over the same periods.
Wallace continued, ‘Behind the overall UK picture, there are of course exceptions across sector classes. Office properties have emerged as the best-performing sector with rent collection 20.5% stronger than the national average decrease this quarter. This is not surprising as the sector has been heavily supported by remote working.
'However, industrial assets have only fared 5.23% stronger than the national average decrease, despite being touted as one of the strongest asset types. Unsurprisingly, retail has been the worst effected and landlords with high exposure to this asset class will experience the largest decline in cash receipts.’
Re-Leased’s analysis is based on live rental collection data from over 10,000 properties and 35,000 leases on its platform.