The coronavirus pandemic is hitting U.K. commercial property hard, as retailers close for an indefinite period and shoppers remain locked down at home.

Coronavirus hits commercial real estate in the UK as retailers fall behind on rent

A pedestrian wearing a face mask as a precautionary measure against COVID-19, walks past closed-down shops on an empty Regent Street in London on April 2, 2020, as life in Britain continues during the nationwide lockdown to combat the novel coronavirus pandemic. The coronavirus pandemic is hitting U.K. commercial property hard, as retailers close for an indefinite period and shoppers remain locked down at home. The country's "bricks and mortar" retail sector has been in a precarious state for most of the last decade as a growing number of people opted to shop online. The retail sector, which was already struggling with the structural shift towards online spending, is likely to be hardest hit," Amy Wood, property economist at Capital Economics, told CNBC last week. Intu, a real estate investment trust with total assets of £10 billion including retail spaces across the U.K., said it received only 29% of the rent due for the second quarter, ending on March 25. Hammerson, another major real estate developer with retail parks in Britain, also warned that by late March it had received only 35% of second-quarter rent from its premium outlets in the U.K.'s biggest cities. "We have received a variety of requests for rent deferrals, monthly payments, and waivers, which we are reviewing on a case-by-case basis," Hammerson said last week. "The situation looks very precarious," Osmaan Malik, global head of real estate at UBS, told CNBC last week. Konstantinos Venetis, senior economist at research firm TS Lombard, told CNBC: "There will probably be a slower recovery in retail rental demand, as some businesses will downsize (or) close; and it will take some time for consumption to get back where it was pre-virus, not least as unemployment is set to jump." Intu, a real estate investment trust with retail spaces across the U.K., said it received only 29% of the rent due for the second quarter, ending on March 25.

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