Regional rent collection drops 35% on Covid-19

18 May 2020 11:15 Sarah Townsend Comments (0)

Commercial rent collection in the North West plummeted in April compared to the average for the last two years, as occupiers struggled to make payments amid low footfall and trading activity during lockdown, new data has revealed.

The region outperformed London, the South West and the East Midlands on collection of rents due for the first quarter of 2020, although some North West cities fared better than others, according to the figures from Re-leased, a cloud-based property management platform.

Liverpool was the city that showed the steepest decline of all 20 top UK towns and cities analysed in the report, with rent collection dropping 50% compared to its two-year average at 25 days post-quarter end date.

Manchester, meanwhile, saw rent collection decrease by 21% in the period, outperforming Central London where rent collection declined by 40%.

Re-Leased holds portfolio and other property management data for landlords on around 70,000 properties worldwide, including 35,000 in the UK, it claims.

The company’s latest research analyses data on rent collection across all commercial asset classes, including office, industrial and retail, in the UK’s 10 regions for the quarter ending 31 March. The research ranks the 20 largest cities or towns by overall rent collection compared to their two-year average.

In the North West, overall commercial rent collection fell by 35% compared to the two-year average by that date, falling slightly short of the UK average of a 30% drop.

The region outperformed London (37%), the South West (44%) and the East Midlands (36%). However, it fell behind the North East (34%), South East (32%), East of England (31%), Yorkshire and Humber (21%), Wales (19%) and the West Midlands (19%).

Wales and the West Midlands have therefore emerged as the most resilient regions, according to the research, while the South West and London have felt the biggest negative impact from the pandemic.

Tom Wallace, chief executive of Re-Leased, said: “Our research shows that landlords across the country are seeing concerning drops in rent receipts because of coronavirus, and many will be facing serious financial pressures as a result.

“They will need to work as closely as they can with their tenants to understand what payments may or may not be possible during these difficult times.

“These conversations will be particularly important as we get closer to June quarter date next month.”

Wallace added: “We encourage tenants to pay what they can afford, to help mitigate the financial strain landlords are now facing.”