Helping real estate back to business

The coronavirus pandemic has affected all aspects of UK real estate, from residential to commercial to industrial. As the property market begins to reopen following changes to the UK’s lockdown rules, two Barclays real estate experts share their forecasts for the sector in 2020 and beyond – and how the bank is ready to offer support during these unprecedented times.

Reopening real estate

Following the UK government’s changes to the country’s lockdown rules, estate agents can now reopen, property viewings can take place and removal firms can resume operations.

With the property market reopening, there are multiple challenges facing the sector, says Steve Thomas, Head of Barclays Corporate Real Estate for the Midlands, Wales and South, which looks after clients with assets above £10m and borrowing requirements between £5m and over £100m. “Most developments will have started to get back on site now because they’ve reviewed government guidelines and are employing social distancing,” he says.

Reopening the market

“Contracted sales have proceeded but new sales have been impacted as sales offices have been closed, although it has been great to see some developers selling online. On the property investment side, we have seen wide variations in rent collection levels from 25% to 95%. Sectors which service hospitality and leisure and retail, have been the most impacted while industrial and logistics have been far less affected. The impact of all that is cash flow is really being diminished and clients need our help and support to get them through this temporary position.”

“We’re still open to support customers”

Alongside administering government-backed schemes such as the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS), Barclays is still “providing new loans which are not part of the Government backed loan scheme”, says Thomas.

“We’re still open to support customers with good propositions in the marketplace. We’re also providing clients with capital repayment holidays and covenant waivers and amendments, so we’re suspending the capital element of loan payments on their loans. That’s been the thrust of our support from the start of the crisis and so far, this has covered over 60 loans with a value over £2bn (as of 22 May). Our team looks after experienced developers and investors in real estate and their conservative approach has helped us support them to withstand this short term shock.”

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