The UK’s office sector is proving slow to wake back up after pandemic restrictions were lifted last month, amid its worst quarter for rent collection since early in the pandemic.
Office rent collection reached 74% at day 60 of the June quarter (24 August), a decline of 5% on the previous quarter at the same point in the rent collection cycle and a 2% fall year-on-year.
Analysis by Re-Leased shows that 69% of commercial rents due for the current quarter were collected by day 60 (24 August). This represents a slight dip on the previous quarter, which stood at 70% at the same point.
Tom Wallace, chief executive of Re-Leased, said: “Despite the lifting of all coronavirus restrictions over a month ago, the impact of more than a year of lockdowns is still clearly being felt.
“While we can see some encouraging signs in the industrial sector, retail remains stagnant, and office rent collection has taken its biggest hit since the first wave of the pandemic.
“This likely reflects the ongoing uncertainty on the return to the workplace, however, landlords have reason to be optimistic for a bounce in the next quarter.
“Last week saw office occupancy levels hit 75%, the highest number since the beginning of the pandemic, according to data from Metrikus.
“September has also consistently been touted as the month in which many workers expect to return to their desks, once the holiday period is over, and the second vaccine programme takes hold, so we may yet see a ‘beginning of term’ boost ahead of the next quarter day.”
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