COMMERCIAL PROPERTY, SALES & LEASINGCORONAVIRUS COVID-19 PANDEMICRESEARCH

Commercial rents collection steady, office the highest

Photo: Note Viriyarat (Australian Property Journal)
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RENT collection levels across the Australian commercial property market have remained steady since May, despite lockdowns in the major markets of Sydney and Melbourne, although retail payments have lagged in New South Wales.

The latest Rent Collection Impact Report from Re-Leased showed collections by day seven of the month have been steady in the 60%-plus area since May, having bounced back from circa-40% lows seen during the 2020 lockdowns.

Office recorded the highest amount of the rent paid in the first week of September, at 73%, followed by industrial at 69%, while retail has languished at 57%. Total collection at day seven was 66%.

“As businesses navigate the latest lockdowns, their ability to operate is the biggest indicator of whether they are able to pay their rent,” Re-Leased CEO Tom Wallace said.

“Unsurprisingly, retail has been hit the hardest, while office rent collection has been picking up nationally as these tenants continue operating with staff working from home.”

Rental collections at day seven of the month peaked at 69% in June after a jump from 54% in April to 67% in May. Office has consistently recorded the highest collection rate, coming in at least 70% since May.

Ahead of the New South Wales Delta outbreak, major retail landlords including Scentre Group were recorded rent collections return to pre-pandemic levels.

Just 50% of retail rent in New South Wales was paid in September as the state endured an extended lockdown and high coronavirus cases. The rate is 16% below the collections in June, continuing a steady decline since the lockdown began that month.

“The sector has not seen such consistently low levels of rent collection since this time last year. Although the NSW government has begun mapping out a path out of lockdown, falling rent collection figures are likely to continue in the short term,” Wallace said.

Queensland landlords have benefited from the state’s clearer run through the pandemic, receiving the highest payments at 71%, followed by NSW at 63% and Victoria at 60%. While South Australia has also benefited from fewer cases, it came in at 59%.

This data has been collected and aggregated directly from over 21,000 properties and 45,000 tenancies in Australia.

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