The latest data from commercial property management software company Re-Leased reveals a regression in rent collection across Australia’s commercial property market.
The report, which analyses rent collection levels in Australia up to 30 May 2022 for each asset class, provides a snapshot of the 2022 aftermath of the 2020-21 lockdowns.
Across all commercial property sectors nationally, rent collected by day 30 of the month has declined from 82.0 per cent in January to 75.2 per cent in May, after steadily increasing in March and April (85.5 per cent and 87.5 per cent respectively).
Victoria has been the hardest hit state, where overall commercial rent collection dipped from April’s figure of 88.0 per cent to 70 per cent after 30 days in May, a notable decrease.
In NSW, all commercial property sectors have exhibited a decrease in rent collection, with an average of 75.3 per cent recorded after 30 days in May, down from 87.2 per cent in February, and 86.8 per cent in both March and April.
Queensland has seen a similar drop in overall commercial rent collection from 87.7 per cent in April after 30 days to 80.3 per cent in May.
After exhibiting a steady recovery this year, NSW’s retail sector dropped to 65.2 per cent after 30 days in May, down from 78.4 per cent in April. This is a similar figure to October 2021, where rent collected after 30 days sat at 64.9 per cent as NSW emerged from a three-month lockdown.
Victoria’s retail rent collection also saw a large drop, with 67.8 per cent collected after 30 days in May, down from 86.4 per cent in April and 89.6 per cent in February. This figure is lower than October 2021, where it sat at 71.9 per during Victoria’s last lockdown.
Rent collection in the NSW industrial sector dropped from a yearly high of 90.6 per cent after 30 days in February to 74 per cent in May. Likewise, Victorian industrial rent collection declined from a yearly high in April of 84.3 per cent to 69.9 per cent after 30 days in May.
Queensland industrial rent collection saw a 10.5 per cent decrease in May to 80 per cent compared to April, the lowest figure recorded this year.
Office rent collection figures have slumped across NSW, Victoria and Queensland, after gaining stability throughout 2022.
Victoria’s office rent collection exhibited the largest decrease of the states, a 20.9 per cent decline, from 93.2 in April to 72.3 in May.
NSW achieved 86.6 per cent in May, down from a yearly high of 91.3 per cent in April, and Queensland recorded 84.1 per cent in May, down from 88.5 in April.
Tom Wallace, CEO of Re-Leased, said, “Curiously, rent collection levels across all states and sectors have fallen in May, reversing the upward trend observed in the first four months of the year.
“With talk of interest rates rising in May (which has come to fruition this month) and the rate of inflation reaching concerning levels, households and landlords are clearly feeling the impact on their hip pocket. Judging by the data, these economic conditions may have already begun to impact Australians’ ability to pay their rent, across all commercial asset classes.
“The industrial sector has been hit particularly hard, as rising petrol prices have had a significant impact on the transport and cost of products.”
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