Commercial real estate holding companies are currently facing unprecedented pressures on rental income as a result of lockdowns, travel restrictions, store closures and offices switching to working from home as a result of the global pandemic. These pressures come on top of the existing difficulties facing many high street stores and anchor tenants including high-profile chains such as Debenhams, the Arcadia Group and Laura Ashley. Hotels, offices and shopping centres have all been affected. The situation is likely to deteriorate further as tenants face increased stress following the recent expiration of the moratorium imposed by the UK Government on landlords serving statutory demands on corporate tenants for unpaid rent.
According to property data company Re-Leased, retail landlords across the UK collected just 54% of the rent they were owed for the December 2020 quarter and there is little certainty for landlords on what the market will look like once the pandemic restrictions are relaxed.
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Distress in the UK Commercial Real Estate Market: The BVI Perspective