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Real estate trusts report May commercial rent payments in line with April


TORONTO — The amount of commercial rent payments for May look to be similar to April, several real estate investment trusts said while reporting quarterly earnings, in spite of concerns the picture would worsen amid extended business closures.

REITs such as SmartCentres, Crombie, First Capital Corp. and CT say levels were similar, despite the additional full month of COVID-19-related restrictions, though the trusts saw wide differences in overall payments.

"Everything seems to be almost identical" to the beginning of April, said Mitchell Goldhar, chairman of the board at SmartCentres on an earnings call, though he noted there are some exceptions.

For April, the trust collected 69 per cent of contracted rent, excluding two outlet centres.

First Capital Corp. CEO Adam Paul said on a conference call that while it takes some time to get a clear picture on payments, May rent collection was "shaping up to be very similar to April."

The trust collected 74 per cent of gross rent payable for April, before adjusting for deferrals, but expects to ultimately collect a "significant portion" of the unpaid April rent.

Paul said they are working on deferrals with small business tenants that are strained. He said the firm will look into the federal government's commercial rent program when they have more details. 

He said there are also large companies who have yet not paid rent but which the trust believes have the means to pay.

"We will take an aggressive approach to collect the rent owed from these tenants," he said.  

Crombie REIT reported that it collected 87 per cent of gross rent and that May was "very much aligned with April."

The trust has also started to put more pressure on larger tenants who they think can pay and have seen some response, said chief operating officer Glenn Hynes.

"The good news is by ... the end of April, when we put a bit of pressure on some of those larger tenants who hadn't paid through default letters, we actually did get a positive response in some cases."

CT REIT, which says about 95 per cent of its tenants including Canadian Tire stores are essential services, said about 97.2 per cent of tenants paid in April, while 96.5 per cent paid in May.

Some real estate companies, however, declined to provide a picture for May.

RioCan CEO Edward Sonshine said that while the trust reported it had collected about 66 per cent of non-deferred April payments, it wouldn't be disclosing details for May as it is focused more on the long-term.

"Monthly rent figures are not an indicator of what will eventually be collected," he said.

Sonshine also committed to considering the federal commercial rent assistance program for small businesses, but like other companies he noted they need to see more details first.

The federal government is expected to announce more details soon as it aims to have the program open in the second half of May.

This report by The Canadian Press was first published May 11, 2020.

Companies in this story: (TSX:SRU.UN)(TSX:CRR.UN)(TSX:FCR.UN)(CTR.UN)

Ian Bickis, The Canadian Press

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