In recent days the news has been filled with landlords announcing their rent collection results following the June quarter day. This is not optimistic reading, with current data (at the time of writing) suggesting around 38% of commercial rents in the UK has been collected. Shopping centres and retail portfolios have been hit especially hard (Intu being the first giant to fall) and a number of landlords will be at serious risk of breaching financial covenants in their debt facilities (if they have not already done so).
It has already been announced by the UK government that the moratorium on rent enforcement mechanisms has been extended to 30 September 2020, meaning landlords are unable to take action to bring in new tenants whose business might be more profitable. With this moratorium now extending past the September quarter date, landlords may struggle to implement changes to increase rent collections for the remainder of the summer.
Against this backdrop, we have seen an increasing number of lenders looking to conduct reviews of the security held to ensure that they have time to remedy any deficiencies well in advance of the taking of any enforcement action.
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