Rent collection rises across hospitality

By James McAllister

- Last updated on GMT

Rent collection rises across hospitality sector

Related tags: Rent, Rent arrears, Coronavirus

The percentage of hospitality businesses able to pay rent has 'significantly improved' over the three weeks following June quarter day, according to the latest data from property agency Colliers.

Overall, collection levels amongst leisure operators rose from 20% on the June quarter day to 41% in the 21 days following.

The café sector saw rent collection levels rise from 15% to 53%, while restaurants increased their levels from 25% to 35%.

“With the continued easing of restrictions we have seen the public return to their local pubs, restaurants and gyms across the first half of this year," says Ross Kirton, head of UK Leisure Agency at Colliers.

"While many are still uncertain about how to tackle rental debt accumulated over the last year, the willingness to pay while still operating at a reduced capacity provides proof that the leisure sector as a whole is more resilient than many give it credit for.

“As long as there are no additional restrictions imposed, levels of collection should continue to rise as we go through the next quarter, boosted by the summer trading period and a return to the office (and thus city centres) for many.”

Rent remains one of the biggest roadblocks​ to the recovery of the hospitality sector.

It is estimated that around £2.5bn in rent arrears has been built up by hospitality firms during the course of the pandemic, with many businesses struggling to cover repayments.

UKHospitality chief executive Kate Nicholls recently told MPs that one in five hospitality landlords are still unwilling to negotiate on rent payments.

Businesses unable to pay rent as a result of the pandemic are currently protected from eviction by the Lease Forfeiture Moratorium, which came into effect at the start of the pandemic and is now set to run until 25 March 2022​.

A new arbitration mechanism has also been introduced in legislation to help landlords and commercial tenants resolve disputes over arrears.

Related topics: Business & Legislation

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