Mid-sized property developers report different levels of rent collection success

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Three property developers, Tritax Big Box REIT PLC (LON:BBOX), LondonMetric Property PLC (LON:LMP) and Helical PLC (LON:HLCL), all reported strong levels of rent collection for the most recent quarter.

The largest, logistics warehouse investor Tritax Big Box, also declared an interim dividend of 1.5625p per share, as it said 89% of four-quarter rents have been paid to date, with another 10% scheduled to be collected on a monthly basis over the remainder of the quarter.

It has not agreed any rent-free periods or rent reductions with any tenants and expects 100% of all rent for the 2020 year will be paid over the remainder of 2020 and into 2021, and even added GBP1m to the rent rolls from reviews of late.

Fellow FTSE 250-listed LondonMetric, which also owns distribution warehouses, as well as offices and retail parks, said 94% of quarterly rent has been collected, with a further 3% “imminently”, 2% being deferred under previously agreed payment plans, leaving less than 1% outstanding.

It said 100% of distribution rent due has been or is being collected, with offices at 97%, ‘long income’ retail at 92% and retail parks at 83%.

Although 5% of the rent roll is currently paying monthly, on top of the 13% of rent paid monthly in line with contracts, LondonMetric said it was seeing “an increasing trend of occupiers shifting away from monthly payment concessions back to paying quarterly under the terms of their lease”.

Smaller Helical PLC (LON:HLCL), an office property investor focused on London and Manchester, said it has collected 84% of the September quarter rents demanded so far, compared to 77% and 85% at the corresponding dates for June and March.

While it expects to have collected between 90% and 96% of this quarter’s rent by the end of December, it still has collected only 91.3% of rents from the June quarter, having granted rent holidays on 4.6% mainly to food and beverage tenant, leaving 4.0% subject to ongoing discussions with tenants.

For the March quarter, Helical has collected 94.7% of all rent, with rent holidays over 2.4% and 2.9% subject to ongoing discussions.

“As the government attempts to navigate a delicate course between protecting the health of the population and providing support for UK businesses and the wider economy, we have been working with our tenants to guide them through this painful and disruptive period,” said Helical chief executive Gerald Kaye.

He added: “Frustratingly, we are now on course for an ongoing period of weak economic activity with the country unlikely to emerge from this crisis before 2021.”

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