VANCOUVER, British Columbia, May 01, 2020 (GLOBE NEWSWIRE) -- A new Colliers Canada report shows that 21 per cent of 7,100 retail, industrial and office tenants surveyed requested April rent relief as Canadian businesses continued to slow or shut during the COVID-19 pandemic. Of these commercial tenants, close to half indicated that they could not afford to make their rent payment.
The Rent Relief Requests: Key Drivers and Owner Recommendations report surveyed commercial tenants across Canada and revealed four key drivers of rent relief requests:
- Tenants whose businesses were completely closed were 3.4 times more likely to request rent relief than tenants who were partially open, open remotely, or open.
- Small business tenants were 2.7 times more likely to request rent relief than regional, national or international tenants.
- Retail tenants were 2.3 times more likely to request rent relief than office and industrial tenants.
- Tenants without access to municipal government support, such as property tax or utilities deferral, were 1.2 times more likely to request rent relief than tenants with access to additional levels of support.
“Now more than ever, tenants and property owners need to openly communicate and maintain strong working relationships to keep businesses on both sides operating,” says John Duda, President of Real Estate Management Services at Colliers Canada. “Property owners should do all they can to enable tenants to remain open or reopen safely, and they should actively participate in government and industry back-to-work committees to ensure that this transition occurs safely and efficiently. In addition, it’s critical that tenants and owners make decisions based on knowledge rather than assumptions, especially in relation to the availability and uptake of government assistance programs.”
Government support programs welcome, but further information required.
On April 24, the Government of Canada announced the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. Though the program introduces measures to provide immediate and effective support for Canadian businesses, there are several areas that require further clarity before landlords can make an informed decision about whether they would participate in the CECRA program.
“We are pleased that the Canadian government is undertaking initiatives to help mitigate the financial impact of COVID-19 on small businesses. However, landlords and tenants are facing pending rent deadlines with some uncertainty, as there are landlords who have indicated that they are still waiting for more program details before deciding to apply for CECRA,” says Duda.“More information is needed in a number of important areas, including how the program will treat landlords who have agreed to revised rental payment terms for April or May with their tenants, when the loan funds will be available and how this program will be rolled out for each province.”
Duda added that increased government support, especially at the municipal level, and safely easing the restrictions on non-essential businesses are two higher impact items that could mitigate the trajectory of May rent relief requests.
Colliers Canada’s Real Estate Management Services will continue to release monthly reports analyzing how COVID-19 is impacting tenants, landlords and the commercial real estate market, to help stakeholders navigate uncertainties as the pandemic continues to affect businesses across Canada.
About Colliers International
Colliers International (NASDAQ, TSX: CIGI) is a leading real estate professional services and investment management company. With operations in 68 countries, our more than 15,000 enterprising professionals work collaboratively to provide expert advice to maximize the value of property for real estate occupiers, owners and investors. For more than 25 years, our experienced leadership, owning approximately 40% of our equity, has delivered compound annual investment returns of almost 20% for shareholders. In 2019, corporate revenues were more than $3.0 billion ($3.5 billion including affiliates), with $33 billion of assets under management in our investment management segment. Learn more about how we accelerate success at corporate.colliers.com, Twitter @Colliers or LinkedIn.
For further information, please contact:
Pamela L. Smith
Director, Corporate Communications, Colliers Canada
Phone: 604-692-1461 / 604-787-8872
pamela.smith@colliers.com
Lindsay Marett
Edelman
Phone: 778-388-3151
lindsay.marett@edelman.com