Businesses still having difficulty paying rent: poll

Canadian businesses continue to struggle with paying the rent as the COVID-19 pandemic keeps its hold on the economy.

According to the latest Colliers Canada survey, about 16 per cent of commercial tenants didn’t make rent last month.

Of those businesses that sought rent relief in April, 39 per cent didn’t make rent for May, while 19 per cent paid partial rent and 42 per cent paid their rent in full.

The survey asked 7,100 commercial tenants across the country about their ability to pay rent this spring, as the COVID-19 pandemic continued to ravage the economy around the world.

It follows an earlier survey in April that found 21 per cent of retail, industrial and office tenants inquired about rent relief from commercial landlords that month.

Rent collection has been deteriorating since February, according to Colliers, with a further drop expected in June before rebounding in July and August. The Canadian real estate company expects it will be about six weeks after businesses reopen before rent collection begins to resume or trend upward again.

“There are several factors contributing to the decline in rent payments from April to May,” said John Duda, president of real estate management services with Colliers Canada.

“These include overall deterioration of conditions that many businesses are facing due to closures or decreasing demand, and the fact that some tenants and owners have been in a holding pattern regarding rent payments and deferral discussions while learning more about the Canada Emergency Commercial Rent Assistance program.”

About 23 per cent have independently negotiated rent agreements with their landlords, with the majority granted rent deferrals and just six per cent granted rent abatement.