Commercial rents: Is everyone paying up?
REIQ Commercial and Industrial Chapter Chair Jason Luckhardt looks at some of the rental collection data to see how Queensland's commercial sectors are tracking compared with southern states:
It's hard to declare if we are forever looking in the rear vision mirror regarding lockdowns and other such trading anomalies as experienced in the past couple of years. Even so, we have at least enjoyed some semi-normal conditions for a while now.
Drawing from data provided by the team at Re-Leased (a leading commercial property management software provider), over 45,000 tenancies were analysed to give insights in office, industrial and retail sectors*.
The data shows that collections overall have been at high levels, albeit well off pre-pandemic levels that would have expected most numbers to be well into the 90-plus percent range.
It is notable that this data comes from the commercial real estate sector with property managers using a system that would be strong on tracking data, payments and compliance to terms. It is harder to gauge what collections might be like in the privately/directly managed space, and in the case of ad-hoc management by residential agencies.
Queensland data demonstrates a resilient data set with consistently high collections. Industrial leads the way and continues to show why it is in such high demand. Notably, NSW industrial is tracking at similar levels and is regarded as one of the nation's hottest location-asset classes.
With many of the properties in the analysed data sitting outside prime capital markets, it is encouraging to see office rental collections remaining at relatively high levels too. It is believed a mixture of government support packages, Lessor concessions at the height of the pandemic, and a resilient SME sector all contribute to this level of outcome.
Overall, the consistent performance of Queensland markets alongside its larger siblings points to a coming of age and a delivery of consistent performance in commercial markets. High levels of quality agency practice and the use of the best tools available will only help to ensure it remains that way.
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*Data has been sourced from transactions relating to over 45,000 tenancies across Australia. All information is from third-party users of the system and is de-identified for privacy reasons. The validity of the information relies upon the individual transactions being recorded correctly. No warranty is given or implied in relation to the information contained herein.
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