The good news is it appears rent collection rates for the current quarter have not dropped from the previous quarter. Three weeks after rents were billed 48% was received versus 47% in the equivalent period after March quarter day, according to data from commercial property management platform Re-Leased.
The bad news is, still only 48% has been received by stricken landlords.
Yes, it is not a complete bloodbath that some people had predicted, given that from late March to mid-June the country was on lockdown.
But how long can landlords keep forgoing rent and what can they do about it?
For now, there is not a lot they can do about it whilst the lease forfeiture and debt enforcement moratorium is in place.
The government announced in March that commercial tenants who could not pay rent would be protected from eviction and temporarily voided statutory demands and winding-up petitions, which are in place until 30 September.
All of the listed property companies QuotedData has spoken to are more than willing to help out a tenant in need.
But it is the large, well-capitalised retailers that have chosen to take advantage of the situation that has left a bitter taste in the mouths of landlords.
High street chain Boots has been singled out by many landlords as having a particularly bad attitude. The chemist has remained open throughout the lockdown due to its essential retailer status and has taken advantage of the government’s furlough scheme.
Yet it has withheld rent and threatened landlords with store closures if they don’t agree to rent reductions.
The issue was raised in QuotedData’s Property Summer Conference series this week. Peter Lowe, fund manager of BMO Real estate Investments, said the property industry had to come together to lobby government for a rent support scheme.
Chancellor Rishi Sunak failed to include any rent relief measures in the mini-Budget, but instead opted for VAT cuts and Eat Out to Help Out in an attempt to support the retail, leisure and hospitality sectors.
Lowe admitted the property sector had been slow to unite and put pressure on the government. Several industry bodies, including the British Property Federation, Revo, the British Retail Consortium and UKHospitality, did come together to call on the government to introduce a scheme that would share the cost of rent between government, tenants and landlords.
The chancellor clearly thought this would be too expensive for the government, but it is believed the proposal is not off the table just yet.
Some form of intervention has to come forward soon because landlords should not and can ill-afford to keep taking the brunt of the pain. Afterall, it is pension funds, retail investors and the public sector own 60% of the UK’s high streets.
QuotedData’s Property Summer Conference continues on Wednesday 22 July 2020. For more details and to sign up click here.