Canada’s largest commercial landlords are seeing some improvements in rent collection as tenants find ways to normalize their businesses during the pandemic. Allied Properties Real Estate Investment Trust, which operates 200 offices and other properties in Canada’s largest cities, expects to collect about 98 percent of rent in its third-quarter as some deferrals roll-off, according to Chief Financial Officer Cecilia Williams. That’s an improvement from the second quarter, when Allied collected 94.5 percent of the $164 million (US$122 million) in rent due, deferred 3.6 percent of payments — mostly from storefront retail tenants — and forgave 1.8 percent in collections under a federal government rent-relief program, according to a quarterly report. Williams said the level of abatements in the third quarter will be about the same, while deferrals are expected to fall.“I expect we’ll have some deferrals still, but it won’t be as much as in the second quarter,” The government extended its Canada Emergency Commercial Rent Assistance, or CECRA, to the end of September. For businesses that qualify, the program covers 50 percent of the rent, the tenant covers 25 percent and the landlord “forgives” the remaining 25 percent. Williams expects the program will be replaced.“The government has said they are looking to implement something else,” she said. “Our working premise right now is that whatever that new program is — and hopefully there will be details soon — we’re assuming it won’t involve any further abatements by the landowners or by the property owners.” SmartCentres Real Estate Investment Trust CFO Peter Sweeney anticipates third-quarter collections in the 94 percent to 96 percent range and “would be perhaps even higher” when accounting for deferrals.
Allen Mayer, Commercial Real Estate Broker specializing in Toronto.
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