Australian commercial property rent collection declined to 75.2% in May, down from 82% in January, according to commercial property management software Re-Leased.
Re-Leased found that rent collected across all commercial property sectors by day 30 of the month had declined in May despite steadily rising in March and April, 85.5% and 87.5% respectively.
“Curiously, rent collection levels across all states and sectors have fallen in May, reversing the upward trend observed in the first four months of the year,” Re-Leased CEO Tom Wallace said.
“With talk of interest rates rising in May (which has come to fruition this month) and the rate of inflation reaching concerning levels, households and landlords are clearly feeling the impact on their hip pocket.
“Judging by the data, these economic conditions may have already begun to impact Australians’ ability to pay their rent, across all commercial asset classes.
“The industrial sector has been hit particularly hard, as rising petrol prices have had a significant impact on the transport and cost of products.”
Victoria was the hardest hit state, where overall commercial rent collection dipped from April’s figure of 88% to 70% after 30 days in May.
In NSW, all commercial property sectors have exhibited a decrease in rent collection, with an average of 75.3% recorded in May, down from 87.2% in February, and 86.8% in both March and April.
Queensland had seen a similar drop in overall commercial rent collection from 87.7% in April after 80.3% in May.
In the retail space, NSW’s retail sector dropped to 65.2% in May, down from 78.4% in April, while Victoria’s rent collection also saw a large drop, with 67.8% collected in May, down from 86.4% in April and 89.6% in February.
In the industrial market, the NSW industrial sector dropped from a yearly high of 90.6% in February to 74% in May, as Victoria’s industrial rent collection declined from a yearly high in April of 84.3% to 69.9% in May.
Office rent collection figures have slumped across NSW, Victoria and Queensland in May, after gaining stability throughout 2022.
Victoria’s office rent collection showed the largest decrease of the states, a 20.9% decline, from 93.2% in April to 72.3% in May.
NSW achieved 86.6% in May, down from a yearly high of 91.3% in April, and Queensland recorded 84.1% in May, down from 88.5% in April.