Commenting on June’s quarterly rent date for commercial property, Andy Pyle, UK head of real estate at KPMG, said.
“Property owners will be braced for even further pain today, with June’s quarterly rent on commercial property likely to see a significant shortfall in payments from cash strapped occupants. Consumer businesses including retailers, pubs and hotels, are front of mind of course, having been disproportionately impacted by the pandemic’s social distancing restrictions.
“COVID-19’s impact has spanned several months now, meaning even fewer businesses will be in a position to pay landlords the rent that’s due. Intervention by BEIS – blocking landlords from issuing statutory demands and other vehicles of pressure for those that haven’t paid – has now also been extended, which will inadvertently exacerbate the issue of non-payment of rent. The key remains distinguishing between those that choose not to pay and those that are truly unable to do so, which isn’t as clear-cut as it may seem.
“Rental payments are a prominent expense for most businesses. This in turn significantly exposes property owners to the financial stress or distress faced by their tenants. It’s vital that landlords and occupants have a close working relationship and a mutual understanding, which is something that will now be aided by the Code of Practice MHCLG issued recently. That said, we can’t overlook the precarious position property owners are being left in currently, with little alternative but to absorb the strain being felt by their occupants. It doesn’t stop with landlords either, we have to remember that this will in turn have an impact on those invested in property, including savers as well as pensioners.”
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