Malls suffer around Rs 3,000 cr loss due to lockdowns

Mall owners have incurred a loss of around Rs 3,000 crore during the ongoing second wave of the COVID-19 pandemic over the last eight weeks due to lockdowns and restrictions imposed by various states across the country.

In the wake of the second pandemic wave, around 25 per cent of the business of the retail side across categories has been lost and this is going to impact the mall owners as well, according to Shopping Centres Association of India (SCAI) Chairman Mukesh Kumar.

However, mall owners would go ahead and complete their under-construction projects as they anticipate demands for commercial and office space once the pandemic recedes, the SCAI said.

Some large retailing groups are scouting for spaces, while looking at the future, the association noted.

"Loss of the retail and malls are humongous. In terms of numbers, I can say that Rs 3,000 crore loss is for malls and around Rs 25,000 crore for retail, all categories put together," said Kumar in a virtual media roundtable.

He further said that typically, around 12 to 15 per cent of total sales revenue for malls "happens from the retail side".

Mall owners have urged the state governments to allow start operation with immediate effect and let the customers experience a controlled and safe shopping experience.

Several states are now mulling easing restrictions.

Delhi Chief Minister Arvind Kejriwal on Friday said the city will now start the process of lifting the lockdown gradually.

Shopping malls have sought an extension over the moratorium on their loans.

Generally, most of the shopping malls get their financing under the LRD scheme (Lease Rental Discounting scheme), which allows developers to use rentals to repay loans.

However, on account of disruptions and frequent shutdown, they are facing challenges on that front also.

"Last time, when the lockdown happened then RBI had announced a moratorium, which was not a big challenge... now two months has gone and there could be some amount of NPAs, if the moratorium is not announced in the coming months," said SCAI director Abhishek Bansal.

The SCAI has also asked for other relief measures such as payment deferment to power companies and an extension on the renewal of existing permits, licences.

Over the under-construction projects, the SCAI said builders who have already started constructions now want to conclude and finish them and start operations.

All of them are eagerly waiting for permission to restart the construction activity again, said SCAI director Pushpa Bector.

However, she also added that malls, which are under development, should see a delay of four to six months on account of various factors such as short supply of labour workforce and supply constraints of raw materials.

Bector further said developers have gone for consolidation of their assets.

"There will be a further phase of consolidation, wherein we see big boys (players) consolidating their assets.

"I believe that the industry would be mature and there could be some new announcements of new malls in the third or fourth quarter of the financial year,” she added.

Photograph: Punit Paranjpe/Reuters