Shopping mall owners' income falls about 50%

Shopping mall owners' revenue declined by around 50% during the last fiscal as the retail sector was badly hit since the outbreak of the COVID-19 pandemic in March last year, according to real estate developers and consultants.

Average monthly rentals in shopping centres have softened by 4-5% across eight cities, although many malls saw rent correction of up to 25%, they said.

Most of the mall owners, which generally leases space in their shopping malls on a revenue-sharing model with retailers having a minimum guarantee clause, gave complete rental waiver during the April-June period of 2020 because of the nationwide lockdown to control COVID.

The 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 COVID on the retail sector has been well reported. The nearly six-month-long lockdown wreaked havoc on the retail segment.

"Fall in revenue for entire last financial year has been about 50% 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 fiscal.

When 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 40-50% 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 period.

Due to the COVID-19 pandemic, average monthly rents in many malls fell by up to 25%, Abhishek Bansal said and demanded that the authorities and banks should assist retailers and mall owners during this crisis.

Mall owners have also been impacted by significant cuts in ancillary revenues from other sources such as pop-up stores, parking and signages