Stenprop has reported that it has now collected 93% of its April-June quarterly rent and agreed to defer payment of a further 2% until later this year.
It has collected 100% of rent payments due for the past two quarters from its UK urban logistics assets, but rent collection from its UK multilet industrial assets has been lower, with 89% collected for the April to June quarter and 75% of rent payments collected for the July to September quarter.
During the April to June quarter Stenprop agreed 25 new lettings, including 17 lease renewals, covering 123,946 sq ft and providing £790,000 per year of new rental income.
A further 44 deals totalling 131,000 sq ft were at the under offer stage at the end of June, and 11 deals for a combined 48,000 sq ft have exchanged.
Stenprop said that half of these leasing transactions were to businesses which, at least in part, were looking to meet the needs of growing e-commerce operations.
On average the new lettings are 22% above the previous passing rent, while the lease renewals are 20% up.
The average rental incentives are broadly unchanged at 3.1 months on an average lease term of 4.2 years, while the average passing rent rose by 0.4% over the quarter to £5.29 per sq ft, up from £5.27 per sq ft.
Occupancy across Stenprop’s multilet industrial portfolio increased from 91.1% to 92% at the end of June.
Paul Arenson, chief executive of Stenprop, said: “The high number of leasing enquiries we have experienced on the UK MLI portfolio over the last four months underpins our conviction as to the resilience of this asset class and the quality of the portfolio we have assembled.
“While we have had a small number of units back as a result of tenant insolvencies due to Covid-19 at present the overall demand continues to outstrip supply, helping us to reduce our overall vacancy rate by 0.9% during the quarter, whilst continuing to achieve further growth in headline rents. The strong pipeline of lettings which we hope to capture throughout the second quarter gives us further confidence.
“While we expect rent collections to remain abnormal for the time being, we are encouraged that rent receipts are now flowing in faster this quarter and on a monthly basis than they were earlier in the pandemic. This is largely as a result of the fact that most of our tenants are now open and trading. We have also made good progress in collecting historic arrears from April and May and remain optimistic that in time we will collect the vast majority of all rent due.”
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