Leisure sub-sectors recovering well and paying their quarterly rent bills
Coffee shops, gyms and restaurant retailers are becoming confident in their recovery post-lockdown and increasingly met their rental requirements, say Colliers.
The property management team at the firm, which collected payments from more than 1200 properties, has seen 66 per cent of tenants pay their rents on the first day of the new quarter. Cafes, fitness studios and restaurants showed significant confidence this quarter.
Some 25 per cent of gyms and fitness occupiers paid their rents on September 29, the highest first day figure since the pandemic began: over the last 18 months the sector has paid below ten per cent on each quarter day.
Also 38 per cent of cafes paid their rents on the latest quarter day, an increase from 15 per cent in June when stores had only just been able to reopen.
Whereas 47 per cent of restaurant tenants paid their rents this quarter day, up from 25 per cent in June and 40 per cent higher than 12 months ago.
Mark Jarrett, head of Property Management at Colliers, says: “The significant rise in payments for restaurants, coffee shops and gyms highlights that when a sector is able to be fully operational then tenants will meet their rental obligations. It signifies that consumer habits are starting to return, although we’re not all fully back to our normal routines the outlook is positive, and should increase more now we’re through the summer holiday period.”
Ross Kirton, head of Leisure Agency, says: “As expected the removal of lockdown restrictions has resulted in further confidence returning to the sector and more occupiers being able to pay their rents on time. We are all conscious that the optimism of last summer was quickly dashed as infection rates rose when autumn set in, so the industry is carefully monitoring the infection and hospitalisation rates. However, there are other challenges facing occupiers now from staffing and supply chain shortages that could also scupper what should be the most important quarter of the year.”
Across commercial real estate asset classes, the industrial sector continued its strong performance from throughout the last 18 months with 79 per cent paid on the day, an increase by four per cent on last quarter.
Jarrett adds: “Office and retail tenants payments dipped slightly this quarter. For retailers, their figures are possibly lower due to missing out on international tourism over the holiday period meaning takings are still not up to pre-pandemic levels.”