British Land welcomes ‘encouraging’ rent collections in latest quarter

British Land has welcomed “encouraging” rent collection since lockdown, with 69% of rent collections received on its September quarter day.

The rent collected comprises 91% of office rent and 50% of retail rent, compared to the collection rate of 36% for retail reported in the week after the June quarter date.

It comes as all of its retail assets are now open and, as of 1 October, 86% of its stores are open, equating to 1,470 units.  

In September, footfall was 84% of the same period last year, which the property group said represented a “continuation of the consistent improvement in footfall” it has seen since the reopening of non-essential retail in June.  

Like-for-like retail sales in September for stores that were open were “encouraging”, with sales at 90% of the same period last year.  

According to the group, its outperformance was largely driven by footfall in retail parks, which account for 48% of its retail assets.

It comes as they said retail parks “played an important role” in a successful online retail strategy, facilitating Click & Collect, enabling returns and supporting mission-based shopping. 

The group said it has seen this trend accelerate with the rise of online shopping, and as a result, September footfall across its retail parks was 89% of the same period last year, while like-for-like sales for stores that were open were 93% of last year’s levels.

Nonetheless, it has seen an increase in CVAs and administrations across the retail market since April. 

It has a further 16 occupiers operating under agreed terms on CVAs or administrations, accounting for 80 units. Of these, 13 units have closed, 62 have seen reduced rents and five remain unaffected. 

In light of this, the group has seen a £11.6m reduction in annualised rents.

It nonetheless remains in “active discussions” with retail occupiers, which led to an increase in rent collection for the June quarter, which now stands at 74%.

Looking ahead, the property company expects September quarter rent collection to improve further over the coming weeks, and in light of its outperformance, it has confirmed plans to resume dividend payments, which will now equate to 80% of underlying earnings.