Coronavirus: Experts are ‘cautiously optimistic’ about the future of the commercial property sector
Experts believe that the UK commercial property may be over the worst of the impact felt by the coronavirus pandemic, stating that there are reasons for cautious optimism in the sector.
The impact of the COVID-19 pandemic has been keenly felt by businesses, with the hospitality, tourism and retail sectors feeling the impact of both the first and second national lockdowns.
The knock-on effect has meant that commercial tenants in offices and retail property have been unable to pay rents over the past few months, with many seeking a reduction in bills or terminating agreements.
However, two separate developments in the sector from key commercial property owners prompted a wave of positivity, with Unibail-Rodamco-Westfield, the largest Shopping Centre operator in Europe, rallying against a series of proposals.
And while Land Securities reported a half-year loss of £835 million, they have committed to several new development projects, worth more than £300 million, and reinstated dividends, signalling increasing confidence in their business.
Commercial property landlords in the retail sector are now also facing the prospect of the Arcadia Group, which includes Topshop and Burton among other high-profile high street stores, going into administration, which could represent further challenges.
Recent figures indicate that rental arrears in the sector are increasing at a rate of £1.5 billion per quarter, a figure which is expected to slow in the New Year, with retail outlets set to re-open for the busy Christmas period and hope that a vaccine in the New Year will see a return to offices.
There are calls from some business leaders to extend the current moratorium on landlords collecting rent, with the current agreement due to expire in January, and fears that without landlords and business owners coming to agreements, the number of evictions could increase.
For help and advice on matters relating to Commercial Property, contact our expert team at WMT – Chartered Accountants today.