This article is from the Australian Property Journal archive
INCREASING costs and interest rates saw commercial property rent collection dive in May across all major sectors following months of steady increases, according to data from property management platform Re-Leased.
Across all commercial property sectors nationally, rent collections fell to just 75.2% in May, having opened the year at 82.0% before climbing to 85.5% and 87.5% in March and April respectively.
Victoria was the hardest hit state in May, with collection falling from 88% to 70%, while NSW was down from 87.2% to 75.3%, having sat at 86.8% in both March and April.
“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,” CEO of Re-Leased, Tom Wallace said.
“The industrial sector has been hit particularly hard, as rising petrol prices have had a significant impact on the transport and cost of products.”
Industrial rent collection in NSW has dropped from a yearly high of 90.6% in February to 74% in May. Likewise, Victorian industrial rent collection declined from a yearly high in April of 84.3% to 69.9%.
Queensland industrial rent collection was down 10.5% over the month to 80%, the lowest figure recorded this year.
Office rent collections slumped across the eastern seaboard. NSW was down from 91.3% to 86.6%, Queensland was down from 88.5% to 84.1%, and Victoria fell a whopping 20.9% to hit 72.3%.
After showing a steady recovery this year, NSW’s retail sector dropped to 65.2%, down from 78.4% in April. This is a similar figure to October last year, where rent collected sat at 64.9% as the state emerged from a three-month delta lockdown.
Victoria’s retail rent collection also saw a large drop. It was at 67.8%, down from 86.4% in April and 89.6% in February, and lower than the 71.9% in October during its own extended lockdown.
