The shortfall in rent unpaid by business occupiers is expected to exceed £8bn by the end of the moratorium on eviction of commercial tenants, according to the latest figures from Remit Consulting.
The moratorium is due to come to an end on 25 March, when the next phase of quarterly rents are due.
Remit Consulting’s ongoing study, into the volume of rent and service charge payments paid by occupiers of commercial property, suggests that investors can expect a total shortfall over the three months of the December quarter of around £5.4m. This means that by the start of the March quarter, the total shortfall in rents since the start of the pandemic is likely to have reached more than £8bn.
Remit’s Laura Andrews said: “Over the past two years, property investors, including many pension funds and other institutions, have experienced a shortfall in the rent payments they receive each quarter. Despite the gradual improvement in the figures over the whole of the pandemic, many business occupiers are still in arrears and a further shortfall, across all commercial property asset classes, of around 6-7% has to be expected by the end of the current quarter.”
She added: “While the end of the government’s moratorium on eviction of business occupiers for non-payment of rent could provide greater clarity for landlords and property managers, resolving outstanding debts will not be straightforward and the financial legacy of the pandemic will continue to be an issue for the property sector for several years.”
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