Colliers International, a Canadian-based global commercial real estate organization, has released recent data regarding the state of commercial rent payments in Canada amid the coronavirus pandemic. According to their findings which are based on a survey of 7,100 commercial tenants, 16% of businesses failed to pay their May rent, while 19% only made partial payments and only 42% were able to make full payments.
Furthermore, rent collection has also been on a declining trend since the onset of financial deterioration in March. Relative to a February baseline, rent collection fell by 1% for the month of March, then further fell by another 10% in April, and then decreased by 13% in May. Colliers is anticipating an even further decline for the month of June before the trend begins to pickup in July and August. Although many provinces are beginning to ease COVID-19 restrictions and businesses are starting to re-open, Colliers is anticipating a delay of at least 6 weeks before businesses are financially viable due to a lag in consumer confidence.
Colliers also found that those tenants that had asked for rent relief, 23% of them were able to come to a direct relief agreement with their landlord without the landlord applying for CERCA. Out of the 23% of tenants, 94% of them had their rent deferred, while 6% of them did not have to pay their rent. Moreover, 46% of tenants were granted a rent relief duration of 3 months, 28% a duration of 2 months, and 1 month of rent relief was granted to 18% of tenants.
Information for this briefing was found via Colliers International. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.