Winterflood Monthly Report - November 2020
Monthly Reports
Impact of second lockdown on rent collection uncertain
Overall, the investment trust sector has navigated the impact of Covid-19 well so far this year. However, there are exceptions and the UK commercial property subsector is enduring a tough time. The last few weeks have seen the release of Q3 updates, with the majority of property funds continuing to see their NAVs fall. However, the rent collection story and its effect on dividend policies is more encouraging and recent dividend announcements include Picton Property Income increasing its quarterly dividend by 12%, having cut it by 29% from the pre-Covid level in April. In addition, Custodian REIT has declared dividends totalling 2.0p per share in respect of the first half of its financial year to 31 March 2021, a third higher than the minimum of 1.5p that was announced in April. AEW UK REIT is the only generalist UK commercial property investment company to have maintained its dividend policy throughout the pandemic.
Rent collection remains more difficult in the Retail and Alternatives sectors, although the figures are in general stronger than at the equivalent point in the previous two quarters and the majority of funds have continued to receive outstanding amounts from the period initially affected by the pandemic. It will be interesting to see what impact the second nationwide lockdown will have on rental receipts, particularly whether tenants who have converted from quarterly to monthly payment plans in light of the pandemic continue to honour these agreements.
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