Shopping mall owners' income dips around 50 pc in FY21 on rental waiver

Shopping mall owners revenue declined by around 50 per cent during the last fiscal as the retail sector was badly hit since the outbreak of the Covid19 pandemic in March last year according to real estate developers and consultantsAverage monthly rentals in shopping centres have softened by 45 per cent across eight cities although many malls saw rent correction of up to 25 per cent they saidMost of the mall owners which generally leases space in their shopping malls on a revenuesharing model with retailers having a minimum guarantee clause gave complete rental waiver during the AprilJune period of 2020 because of the nationwide lockdown to control Covid19The mall promoters offered huge discounts during the remaining nine months of the last fiscal as well resulting in a huge dent in their overall income The effect of Covid19 on the retail sector has been well reported The nearly sixmonthlong lockdown wreaked havoc on the retail segmentFall in revenue for entire last financial year has been about 50 per cent and with the second wave it will again be the same Pacific group Executive Director Abhishek Bansal told PTI when asked about the impact in FY21 and the outlook for this fiscalWhen contacted Harsh Bansal the Director of Unity group that has several malls in the national capital said there was a huge impact during the last fiscal and the total rental income was only about 4050 per cent of the normal year He however said the rentals for the fresh leasing has not declined in its mall although the company is offering some discounts for a limited periodDue to the Covid19 pandemic average monthly rents in many malls fell by up to 25 per cent Abhishek Bansal said and demanded that the authorities and banks should assist retailers and mall owners during this crisis Shubhranshu Pani MD retail services JLL India said the impact of rentals on shopping centres has been manifoldFor mall owners he said the impact of Covid19 during the March 2020 to March 2021 period was around 50 per cent mainly due to loss of rent and operational costs Pani said multiplex contributes 15 per cent to the overall rental income of mall owners and this has been almost wiped outPankaj Renjhen COO amp Joint MD Anarock Retail said developers would have definitely seen a fall in their overall revenue last fiscal year but its difficult to quantify Now with the second wave coming in and malls being shut across most cities there is no doubt that it will once again wreak havoc and severely impact the sector he addedCushman amp Wakefield said that mall rents on an average across the top eight cities have declined by about 45 per cent after the pandemic Average rentals in superior malls have witnessed marginal rental corrections but the good and average malls witnessed rental corrections up to 710 per centRevenues of shopping mall owners fell by about 4050 per cent during the last financial year Rental negotiationsdiscountswaivers amidst the second wave are likely to impact their revenues again this year Cushman amp Wakefield said Revenues of mall owners are expected to rise given the low base in 2020 it addedHarshvardhan Singh Director Commercial Advisory amp Transactions Retail Savills India said rents have reduced in the range of 15ndash25 per cent in many malls Revenues on the other hand have taken a slightly higher hit he saidMall owners have not just been impacted by concessions given to tenants in terms of rent reductions but also by way of significant cuts in ancillary revenues from other sources such as popup stores parking and signages Singh saidWeak consumer sentiment along with stringent lockdowns and restrictions in the wake of the pandemic have significantly slowed down mall businesses in India since March 2020 he notedSingh said malls were gradually getting back on their feet with most showing an upward trend However he said the ongoing second wave of the pandemic has once again slammed brakes on the retail industry due to the intensity and severity of the current health crisisThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever