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The impact of a third lockdown continues to impact the level of rent tenants are paying.

New data from Re-Leased, the cloud-based commercial property management platform, shows the rate of rent collection in the UK remains subdued as the economy begins to open up.

Analysis of live rental collection data from over 10,000 commercial properties and 35,000 leases on Re-Leased’s platform reveals 56% of commercial rents due for the current quarter were collected by day 21 (16th April).

LIS Show – MPU

While this marks a rise of 35% on the level of rent collected on due date (25th March), it remains lower than the equivalent period in the preceding three quarters.

The impact of a third national lockdown continues to constrain the rate of rent collection, after some recovery came through at the end of 2020.

While consumer and business confidence start to improve as social restrictions are lifted, tenant confidence and financial security remains stifled.

Total %rent collected
(as of day 21)
Dec Qtr 2019 Mar Qtr 2020 Jun Qtr 2020 Sept Qtr 2020 Dec Qtr 2020 Mar Qtr 2021
UK ? all commercial* 75% 54% 57% 60% 60% 56%
Retail 77% 47% 48% 58% 56% 52%
Office 68% 61% 65% 71% 67% 67%
Industrial 78% 61% 65% 59% 67% 61%
*Includes other asset classes with smaller sample sizes e.g. leisure

Caleb Dunn, Analyst at Re-Leased, said:

“As the economy begins to open up, a rally in rent collection has not followed.”

“The burden of a third national lockdown has added to the substantial pressure on occupiers and landlords, and confidence levels have yet to meaningfully rebound.”

“Rent collection performance is a valuable barometer for business and occupier performance in the UK.”

“These figures illustrate the strain both property owners and tenants continue to navigate.”

“While wider confidence in the economy begins to come through as we reach June 21st, it’s critical to remember the pandemic has devastated the stability of rental income for over 12-months.”

“Landlords continue to face substantial shortfalls, and many are now struggling to service their debt obligations.”

“We are encouraged by the government’s commercial rents consultation.”

“We hope it will bring forward measures that consider equally the financial strain of both landlord and tenant and support better relationships.”

Behind the overall UK picture, each sector is responding differently to the crisis:

  • Retail continues to be hardest hit; the sector has recorded the lowest rate of collection this quarter at 52%, however has shown improvement compared to June last year.
  • Offices recorded the strongest rate of rent collection at 67%, on par with the December quarter and ahead of the June quarter last year.
  • Industrial has consistently been considered a more resilient sector, however it has seen a surprising dip in collection rates compared to June and December.

There are also significant variations in rent collection across the country.

A breakdown of the UK’s 10 regions reveals that East Midlands is the most resilient region this quarter, while the North East is the least resilient.

Total % rent collected(as of day 21) Dec Qtr 2019 Mar Qtr 2020 Jun Qtr 2020 Sept Qtr 2020 Dec Qtr 2020 Mar Qtr 2021
East Midlands 77% 58% 59% 58% 65% 65%
Yorkshire & Humber 63% 55% 51% 63% 65% 63%
North West 74% 47% 40% 54% 51% 52%
Wales 76% 57% 70% 67% 62% 59%
West Midlands 71% 65% 74% 65% 73% 63%
East of England 71% 61% 51% 62% 67% 53%
London 81% 49% 54% 48% 54% 49%
South East 69% 47% 60% 58% 51% 48%
North East 54% 80% 33% 52% 36%
South West 77% 43% 36% 40% 32% 39%
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