UK - Commercial Property News April 2020 Compiled by Hayven Property Tax

Commercial property is always a very newsworthy topic. Here is a roundup of the latest news (April 2020) concerning commercial property and investments in the UK. At the time of writing, the official UK death toll connected to coronavirus is fast approaching 13,000, so it is hardly surprising that the virus dominates the news including how COVID-19 Coronavirus is impacting property and rents.

Coronavirus hits commercial real estate in the UK as retailers fall behind on rent

The coronavirus pandemic is hitting U.K. commercial property hard, as retailers close for an indefinite period and shoppers remain locked down at home, reports CNBC.com.

The country’s “bricks and mortar” retail sector has been in a precarious state for most of the last decade as a growing number of people opted to shop online. However, customers that still savoured the in-store experience are now stuck at home, after the U.K. government imposed a nationwide lockdown in late March.

Only grocery stores and pharmacies remain open, meaning that restaurants, pubs and other high street stores are closed, with no customers, and many are struggling to pay their rent.

“We expect London commercial property values to fall sharply in the second quarter. The retail sector, which was already struggling with the structural shift towards online spending, is likely to be hardest hit,” Amy Wood, property economist at Capital Economics, told CNBC last week.

Intu, a real estate investment trust with total assets of £10 billion including retail spaces across the U.K., said it received only 29% of the rent due for the second quarter, ending on March 25. In comparison, the company had received 77% of the payments due the time last year.

Hammerson, another major real estate developer with retail parks in Britain, also warned that by late March it had received only 35% of second-quarter rent from its premium outlets in the U.K.’s biggest cities.

“We have received a variety of requests for rent deferrals, monthly payments, and waivers, which we are reviewing on a case-by-case basis,” Hammerson said last week.

Landsec, a U.K. real estate manager, has noted a “huge shift” in how its buildings are used due to the “rapid spread of CV-19?. The company added that 65% of the rent due on 25 March was paid by 31 March, compared with 96% for the same period last year.

“The situation looks very precarious,” Osmaan Malik, global head of real estate at UBS, told CNBC last week. He added that the future prospects of retail property will very much depend on how long the lockdown lasts.

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Government orders to stay at home were introduced on March 23, and although they are due to be reviewed next week there is no end date for the lockdown yet.

However, health experts and government officials have warned that life won’t return to normal overnight. There are expected to be gradual steps towards normalisation, which makes it unclear when shops, bars, cinemas and restaurants will open their doors again.

Hayven Property Tax is an independent commercial property tax consulting company who are experts in capital allowance claims for commercial properties.

Based in Cardiff, we are able to service clients across the United Kingdom.

You can read our full news article here or contact us and we will answer any questions you may have: www.hayvenpropertytax.co.uk/commercial-property-news-april-2020/