Market Insight

Learning from the pandemic: What are the positives for landlords?

November 24, 2020

It has been an incredibly difficult year for landlords, many of whom have been unable to collect rent from tenants struggling amid the ongoing COVID-19 pandemic.

It has been an incredibly unusual year for landlords, many of whom have been unable to collect rent from tenants struggling amid the ongoing COVID-19 pandemic. 

Protected by Government COVID-19 legislation, occupiers of commercial and residential property who have been unable to pay rent, have been protected from eviction, leaving many landlords on a financial knife edge. 

However, with the roll out of the vaccine and plateauing infection rates, there could be light at the end of the tunnel for landlords as businesses prepare to re-occupy their office post-second wave. 

The pandemic has resulted in a more forensic and proactive approach to property asset management. 

In-depth investigation into tenants’ businesses and the sectors they operate in, has become the norm, helping to anticipate future payment hurdles and plan payment strategies to deal with these transparently and collaboratively, in advance. 

Of course, retail continues to struggle, and we are and will continue to see significant change in this market over the coming year as urban real estate investors reassess and repurpose their portfolios to account for this brave new COVID-19 world. Indeed, our town centre regeneration specialists are already advising several high-profile high street brands in this regard.  

Meanwhile, there are some chinks of light for landlords operating in the residential and commercial property markets as we see demand for housing need increase and commercial property enquiries tentatively rise in the office sector, as businesses begin to think about their future property needs.

Industrial demand is also surging as logistics and e-commerce business goes through the roof, representing a significant opportunity for the industrial property landlord / investor.

Overall, however, rent collection remains challenging for landlords and will continue to remain so for some time. But there are some positives that landlords can take from this whole experience (yes, really!). 

Whilst COVID-19 has clearly caused a great deal of financial and practical pain for landlords, in our experience, it has also served to bring many landlords and their tenants together. 

The pandemic has created a unique situation in which we find ourselves, and we are all in en masse.  

Recognising this and the challenges that we all face has, in our experience over the last nine months, helped landlords and tenants to work more collaboratively than ever. 

Long gone are the adversarial days of the landlord and tenant relationship. Landlords understand the need to take a more bilateral approach to their tenant relationships, making the process of paying rent as painless as possible for everyone. 

That is where effective property asset management can play a significant role. Core to our property asset management service is the ability to communicate clearly and effectively with our landlord clients and their tenants, to manage and nurture the relationship between the two.  

We understand that landlords want their tenants’ business to be successful, they want them to succeed, because, ultimately, they want to retain them as an occupier. 

Recognising this and working positively together, taking time to understand the respective positions of landlord and tenant, helps us to reach agreement on rent payments and arrears, where appropriate It has enabled occupiers to remain in business, whilst achieving some income for our landlords, but ultimately, it has ensured that our client don’t end up with a vacant property.  

Now is not the market for landlords to have a vacant building. Empty real estate will yield nothing, yet cost everything, in empty rates and maintenance if nothing else. 

So, creating long term relationships with tenants – your customers – is vital and those landlords who foster these sorts of relationships will win out in the current climate. 

Of course, there will be times when the relationship between you and your tenant does break down and, in those circumstances, we are here for you where enforcement action is required and will provide the professional support needed throughout this process.  

Not just that, once your building is vacant, we can then draw upon the expertise of the rest of our business to work with you to develop the right property strategy to take your investment forwards – be it through refurbishment, re-letting, repurposing / redevelopment or sale. 

Yes, the market remains challenging for landlords, but there are positives to take from this unique experience and we will work collaboratively with you to achieve the best possible solutions – both for your benefit, and that of your tenants. 

For more information about our property asset management service, get in touch.