Bluewater owner, Landsec, is still facing difficulties with rent collections in the midst of the ongoing Covid-19 pandemic. The UK commercial landlord has reported a significant drop in rent collections, especially in its retail properties like Bluewater in Kent and Trinity in Leeds.
In a recent update, Landsec revealed that rent collection for the final quarter of 2020 stood at just 65%, a sharp decline from the 94% collected during the same period the previous year. This decrease is primarily due to the impact of the pandemic on retail businesses, as well as issues with retail failures and renegotiated rental agreements. Out of the total £112 million in rent owed, £11 million was deferred due to business administrations or Company Voluntary Arrangements (CVAs), and another £14 million was withheld by tenants pending documentation of agreed upon concessions.
Rent collections in central London, where Landsec’s retail and leisure properties are concentrated, plummeted to 29%. Similarly, only 36% of regional retail tenants paid their rent in full for the final quarter, as lockdown restrictions and tier system changes leading up to the holiday season forced many businesses to close their doors.
Between March 25th and December 24th, Landsec managed to collect 80% of the net rent due out of a total gross amount of £553 million. However, insolvencies and CVA agreements contributed to a £15 million decline in rent collections, along with an additional £21 million in agreed discounts and £8 million in postponed payments.
Despite the rent collection challenges, Landsec still maintains a substantial portfolio valued at £11.8 billion, covering 24 million square feet of space. In comparison, rival British Land was able to collect 71% of the total rent due for the December quarter, with £86 million owed including £42 million from retail tenants.
The lasting impact of the pandemic continues to weigh heavily on commercial landlords like Landsec and British Land, as they strive to address rent collection struggles and devise strategies to assist struggling tenants during these uncertain times.
For further information on Landsec and their ongoing rent collection challenges, you can visit their official website here. Additionally, to learn more about the impact of Covid-19 on the commercial real estate sector in the UK, you can read this informative article here.
