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UK real estate firms have been among the worst hit by the fallout from the coronavirus pandemic, according to new data.
The number of real estate firms in critical financial distress jumped 21% to 155 in the first quarter of 2020, according to Begbies Traynor. Only bars and restaurants fared worse, with a 37% increase to 119. Begbies Traynor said critical distress is usually a precursor to insolvency.
Wednesday Bisnow is hosting a webinar with Dragon’s Den star James Caan, looking at issues such as preserving cash, recruitment issues and managing payroll so businesses can come out of the other side of the crisis alive. You can register here.
Construction also saw an 11% increase in firms in critical distress.
Real estate saw the biggest year-on-year jump in the number of firms in financial distress of any kind, with the figure rising 17% to 56,421, Begbies said.
Overall, the number of firms in the UK in financial distress at the end of Q1 was 509,000, the highest figure ever.
“We hope that the concerted effort made by the Treasury to stand behind UK businesses through its package of measures proves to be successful so that the business community and ultimately the UK economy can withstand the huge pressures placed upon it during this time,” Begbies Traynor Executive Chairman Ric Traynor said. “The truth is that this crisis has hit all business owners by complete surprise. They weren’t ever expecting to face such a drop-off in activity or footfall, and few can be prepared for such a cliff edge in revenue.
“Those businesses with strong balance sheets and access to funding will be able to reorganise their operations and survive the financial shock of this pandemic, while others will unfortunately not have the resources to carry them through this emergency and the uncertainty to follow.”
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