Business rent collections for offices in the UK are at a low as the economy still struggles with Brexit and the pandemic but things are slowly improving.
The office sector is facing the worst month for rent collections since the start of the pandemic and first lockdown. Recent data shows office workers have slowly returned throughout August and many more are expected to go back to their places of work in September.
During Q2 of 2021 office rent collections reached 74% which is a 5% decline on Q1 and a 2% decline year-on-year. Interestingly retail and industrial sector rent collections increased in the same period due to restrictions being lifted and trade resuming.
Analysis across all commercial property sectors demonstrates that in total 69% of rents were collected in Q2 in comparison with 70% of rents which were collected in Q1.
Data surveyed by CPRA from our own client database gives a reason to be more optimistic. Office occupancy levels are currently averaging 76% which is the highest level since the beginning of the pandemic. September is also expected to be when swathes of office workers, who are currently working from home will return to the office following summer breaks and second vaccinations.
Commercial landlords will need to adapt and work more flexibly with tenants moving forward, particularly in London where rent collections are currently as low as 56% according to a recent survey.
If you are a landlord or tenant looking for sales and letting advice or considering a rent review or lease re-gear to help your business navigate the challenges of Covid-19, please feel free to contact the CPRA agency or lease advisory teams on 020 7770 8000 or email firstname.lastname@example.org.