Rent collection at listed landlords Landsec and Derwent continues to underline the struggles faced by real estate owners and their tenants during the Covid-19 pandemic – and the gulf between office and retail collections.
At Landsec, just 65% of £101m due in rent for the quarter ending 25 December had been collected within five days, compared with 94% for the same period last year.
Office tenants, which made up the bulk of the rent due, paid 87% of rent during the period, while non-office central London tenants paid just 29%, or £2m of £7m. Regional retail tenants had paid 36% of rents.
At Derwent, office tenants had also paid 87% of rents for the quarter, while retail tenants had paid just over 25%.
A higher percentage (91%) of Derwent’s rental income comes from offices, meaning that it received 83% of overall rents for the period.
Both London-listed REITs have continued to collect rents for previous quarters, with Landsec now having collected 80% of the income due for the period between 25 March and 24 December. Derwent said that for the September and June quarters, it had collected 87% and 92% of rent respectively.
Yesterday, British Land said it had collected 46% of the rent due from retail tenants during the December quarter, despite hailing “resilient” footfall at its shopping assets.
Landlords have gone into the third coronavirus lockdown with retail tenants unsure of when they will be able to reopen, and offices closed for the near future. Chancellor Rishi Sunak announced another £4.6bn package of support for retail and leisure businesses for the first three months of the year, but experts have warned that measures must go beyond 31 March.
Derwent London owns 83 buildings in a portfolio predominantly in central London, valued at around £5.4bn, while Landsec’s £11.8bn portfolio spans 24m sq ft.
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