Sharp drop in commercial tenant performance - When will it turn around?
By guest contributor: John Loos, Property Sector Strategist - FNB Commercial Property Finance
Commercial tenant payment performance dropped sharply in the 2nd quarter of 2020 with retail tenants being the most under pressure of the 3 commercial property sectors.
Not surprisingly, the "COVID-19 lockdown period" brought a dramatic weakening in commercial tenant payment performance in the 2nd quarter 2020, following a far more gradual decline in prior quarters. From 77.85% in the 1st quarter of 2020, the percentage of tenants in good standing dropped to 50.36% in the 2nd quarter.
Preliminary monthly tenant payment performance data up to July showed a partial recovery starting in June and July on the back of the easing of lockdown levels. More noticeable improvements have been seen to date in the Office and Industrial Property Segments, while the beleaguered Retail Property Sector appears to be battling.
Please click here to read the Commercial Rental Monitor for Q2 2020