May 11, 2021 03:17 PM
The retail sector has been hit hard by the Covid-19 pandemic. Real estate developers and consultants say shopping malls’ revenue fell by 50 per cent in the last financial year. On average, rents in shopping centers in eight cities are falling by 4–5 percent per month.
Rents in most malls have dropped by as much as 25 percent. Mall owners usually enter into a lease agreement with the retailer on the basis of a minimum income guarantee. However, during the lockdown last year, rents were completely waived.
Even in the second wave:
From the time the lockdown was lifted until March, mall owners have been cutting rents. As a result, their total income dropped. Pacific Group CEO Abhishek Bansal said revenue had halved in the second wave. Unity Group Director Harsha Bansal said rental income was limited to 40–50%.
He said rents from newly leased retailers have not dropped, but are being given discounts for a limited time. Cushman and Wakefield predict that mall owners’ incomes will fall by 40–50 percent in the current fiscal year.
Other incomes also declined:
Multiplexes account for 15% of total rental revenue. JL India Retail Services MD Shubhranshu Pani said that now the revenue from these is not coming in full. Apart from rent, parking, pop-up stores and advertising revenue were also lost, said Harshavardhan Singh, director, Savils India.
Retail sector has been hit hard by the Covid-19 pandemic, He attributed the current situation to falling sentiment among consumers since March last year. He said the second wave had become a threat as the malls were recovering.