Colliers Property Management

2021 Rent Collections | March Quarter

Quarter Day + 1 Month

Rent Collection by Sector

Quarter

Update

Two weeks on from the re-opening of non-essential retail, gyms and 'some' leisure; beer gardens have been bustling and high streets revived with life, since the first stage of easing lockdown restrictions. Rent collections have jumped by 26% since the March quarter day, accelerated by a stellar performance from retail, increasing by a staggering 39% since the March quarter day.

Across our key property sectors, we are still yet to get back to pre-pandemic levels, however one month on from the March quarter day, we have seen the highest collection figures in comparison to previous quarter periods since the start of the pandemic; currently sitting at 83%.

Retailers have proved that high street shopping is not dead, increasing from 25% to 82% in the last four weeks alone. However leisure is still suffering the hangover from forced closures and has been slow to respond to the opening of select hospitality just over two weeks ago. A few more rounds of punters at the pub will be needed until we see collections increase significantly; rising from just 18% to 27% in the last month.

The office and industrial sectors have clearly rebounded strongly from the Covid lows in the last two quarters and are now posting rent collection data at 86% and 91% respectively.

With the economy continuing through the slow and long awaited transition out of lockdown, the first stage of easing restrictions has showed positive results and we hope to see the sun keep shining, pubs and restaurants full, and increasing footfall for retail operators over the coming weeks.

Mark Jarrett

Head of Investment Property Management

Quarter Day + 1 Month Collections

Quarter Day Collections

Heart of the Northland

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Heart of Kent Valley

Heart of Pierce County

Quarter Commentary
Sector Spotlight

Retail

"Retail has seen one of the biggest jumps in rent collection since the start of the March quarter, from 38% to 77%. High Street has seen the largest increase from the quarter date, now at 82% collected, which is unsurprising given the queues that have seen outside our popular chains. Out of town retail has also seen a significant jump in collections since March Quarter Day, ending the month at 68% collected.

The past twelve months have further highlighted the importance of clear communication and a partnership approach in successful rent collection. These proactive landlords are the ones typically benefitting from higher collections and stronger relationships with their occupiers as restriction lift for the retail sector."

Dan Simms, Co-Head of Retail Agency

Leisure

"Two weeks on from the latest lockdown restrictions easing, it has been positive to see beer gardens full, outdoor dining taking off and gym-goers back in action after what has been the toughest year yet for the industry. Rent collection, whilst still low as operators recover from months of closure, has started to gain momentum, with 27% collection, up from 18% from the March quarter day. Those operators who don’t benefit from external areas will continue to feel the strain until the next restriction easing is announced in late May."

Ross Kirton, Head of UK Leisure Agency

Offices

"Whilst the office sector has been relatively resilient in terms of rent collection throughout the pandemic, the lockdown at the beginning of this year highlighted the strain working from home has been putting on many. This has been demonstrated in the collection statistics which have continued to grow, with 86% collected, up from 61% on the March quarter day. National Offices are still collecting higher than their London counter parts, with 90% of rents collected one month on from the quarter day. This is partially due to London’s reliance on public transport, but as non-essential retail and leisure has opened, there has been even more incentive to get back to London’s offices.

We have seen a substantial increase in demand for Air Quality monitoring systems in recent months and believe this will be a requirement high on many occupiers agenda as they return to the office or acquire future space."

Mike Hawkins, Head of National Offices

Industrial & Logistics

"Industrial, across all subsectors, has continually excelled in rent collection performance and this remains the case over 12 months since the beginning of the pandemic, at 91% one month on from the March quarter. I wouldn’t say any sector has been pandemic-proof, but I&L weathered the storm well and has come out the other side stronger. Investor demand remains at an all time high, with competitive bidding particularly in last mile and large distribution warehousing."

Len Rosso, Head of Industrial & Logistics

Rent & Service Charge

Collection

Rent Collection

Service Charge Collection

Occupier optimism continues to grow with the strongest quarter day results in over 12 months with 83% of overall rents collected.

Whilst the plus one month figures were accelerated by the stellar performance from retail, offices and industrial continue to also deliver good results.

Leisure has shown some improvement from the quarter day however operators are continuing to keep their hands in their pockets for now when it comes to paying rent. Beer gardens are open and pints are being poured but with the coldest April in eight years, the May 17 opening of indoor hospitality can't come fast enough.

We have collected 75% of service charge so far this quarter which although is less than we would collect in a normal quarter pre-Covid it is higher than what we have collected in previous quarters and continues to show optimism across our key property sectors.

Interestingly here, it was Offices which had the highest service charge collection with 79% collected, however with employers preparing for staff return to their offices, this was to be expected.

Surprisingly this was followed by Retail which has had 72% of service charge collected, followed by Industrial with 69%.

Colliers Property Management

Quarter Day + 1 Month

Rent Collection by Sector

Quarter