The March Quarter Day Had A Winner, And It Was Sheds

Whilst retail landlords are looking at their March quarter day rental figures and weeping, landlords with a heavy weighting toward the logistics sector are, relatively speaking, in the money.

Logistics landlords endured a relatively painless 25 March, if figures from Segro are indicative of the wider market. Segro reported 71% of tenants paid on time.  

For comparison, this time last year 96% of March rent had been paid. A free Bisnow webinar will look at the prospects for the urban logistics sector on 7 April.

Unlike many shopping centre landlords, such as intu and Hammerson, whose rental income has collapsed to between 30% and 50% of normal levels, Segro said that it is still collecting the vast majority of quarterly rent payments, while many tenants were looking for additional floor space for immediate occupation and long-term growth once the crisis is over.

However, up to 25% of its warehouse tenants need extra help to pay their rent, the company said, as the serious economic impact of the coronavirus pandemic becomes clearer.

“We are currently working, on a case by case basis, with customers across the group representing approximately a quarter of our total headline rent requesting appropriate relief, primarily through reprofiling the timing of rental payments,” Segro Chief Executive David Sleath said.

“Whilst current global events are unprecedented, we anticipate that the structural trends that have been driving occupier demand for high-quality, well located warehouse space will remain intact and may even be strengthened by the crisis, as the importance of logistics supply chains has been thrown into sharp focus in recent weeks."

As a result of the relatively high level of rent collection Segro will continue to pay a dividend to shareholders, while companies with retail exposure like Intu, Hammerson, Landsec and British Land have all cancelled theirs.