More than half of Scotland’s landlords have highlighted serious or terminal financial challenges owing to coronavirus-related rental income losses, according to the latest survey from the Scottish Property Federation.
A total of 88% commercial property owners and investors identified as small and medium-sized enterprises, according to the survey, which covers more than 1,600 commercial tenancies in Scotland.
A 68% majority indicated that their businesses undertook development and regeneration activities in Scotland.
None pointed to insurance support for commercial property owners impacted financially by coronavirus-related issues.
The SPF pointed to a willingness on the part of property owners to work with their tenants, with all respondents indicating that they had agreed or offered some form of new arrangement to support their tenants during the coronavirus crisis.
Of these, 56% said they had tenants who could pay rent but were choosing not to do so, since additional protections from eviction for non-payment of rent were introduced under the Coronavirus Acts in the UK and Scotland.
Just over three-quarters (76%) also said they had tenants imposing terms without discussion with their landlord.
Landlords said multinational business tenants were the least likely to work with them, while SME tenants were more willing to work together to agree terms.
Robin Blacklock, SPF chair and managing director of Dowbrae Property Consultancy, said: “The commercial property sector contributes some £4.8bn to the Scottish economy and is an economic catalyst for jobs and investment.
“Despite this contribution, the survey clearly shows there is little or no financial support for the sector, which is facing mounting cashflow issues with lack of income on one side, and continuing tax and finance costs on the other. There is clear and present market failure, yet little or no support available.”
He added: “There is a warning in the survey that the very people we need to see investment in our commercial and town centres are the ones with no cashflow and no support.
“As we look to rebuild our economy after Covid-19, there is a very real risk that our investment community will simply not be there.”
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