Malls’ operating income could decline 45-60%: ICRA Research

13

New Delhi, July 2 | Malls’ operating income is expected to decline by 45-60 per cent in FY2021, ICRA Research said on Thursday.

The Covid-19 outbreak and the subsequent lockdown to curb its spread has devastated the retail industry, excluding e-commerce firms.

According to ICRA Research, mall operators have been significantly impacted due to the closure of operations for around three months.

“Over the last few weeks, though malls in some cities have resumed operations, properties in some of the metros and tier-I cities are yet to resume due to the severity of the pandemic in the respective geographies,” ICRA Research said in a statement.

“These markets are economically critical and uncertainty about opening malls in these geographies may hurt the players present in these markets.”

As per the report, tenants have been negotiating with the mall operators for a waiver or rebate on the rentals.

In operational aspects, mall operators and tenants are considered to be long-term business partners with lease tenures of up to 30 years in some cases.

“A disruption of three to six months is a relatively small period and hence both parties are willing to resolve the issues,” the statement said.

“Broadly, the mall operators are agreeing to let go of the rents anywhere between 50 to 100 per cent during the lockdown period and the quantum depends on the balance sheet strength of the mall operator, the competitive advantage of the property and the bargaining power of the retailer.”

Accordingly, mall operators, recognising a possible weakness in the performance of the retailers even after resumption, are offering a staggered reduction over the next two to three quarters.

“At the same time, the operators are also imposing terms like no near-term lease terminations and increased revenue share component for the residual period of FY2021,” ICRA Research said.

“The current terms are being worked out with eligible tenants like anchor and vanilla retail stores. However, tenants like multiplexes, restaurants and family entertainment centres are still not allowed to open in many places and those terms are likely to be worked out separately.”

ICRA expects the cash flows of malls in FY2021 to get significantly impacted due to the discounts being offered to the tenants in the minimum guarantee rentals.

Further, the revenue share income is likely to be depressed throughout the year.

“It is estimated that the impact on key financial metrics like net operating income and debt service coverage indicators will be acute due to the rent waivers. It will vary based on revenue share, cost optimisation and leverage levels,” ICRA Research said.

“The possibility of a structural shift towards a greater number of pure revenue-sharing agreements will be the key monitorable going forward.”

Source: IANS

Sponsors Posts

Nirman Nagar Kajarwara Jabalpur by One Realty Developers - BhaskarProperty.com

Nirman Nagar Kajarwara Jabalpur by One Realty Developers - BhaskarProperty.com

Reliability, Quality, Assurance, and Authenticity have always been pillars of One Realty Developers. Reaching new heights every year and catering to the masses ever since 2011, we bring you NIRMAN NAGAR a 9 Acres affordable housing Township in Kajarwara just 4.8 km from Sadar.

In NIRMAN NAGAR we bring you an array of affordable housing options to choose from Plots, 2 BHK singlex, and 4 BHK duplex. Three beautifully landscaped gardens with amenities like a children’s play area, water fountain, and a badminton court.

The drainage system is Hi-tech and fully underground so are the security and surveillance system in the township. This RERA-approved township has tie-up with all major banks for the finance facility. We believe that the cornerstone of any great structure is a great idea and that one of the greatest joys of life is to see your idea brought to life before your own eyes. This is the Endeavor One Realty Developers undertake, to bring your ideas from abstract concept to solid reality.

Singlex & Duplex Specification

FRAMEWORK RCC framed structure. SUPERSTRUCTURE Conventional brick masonry.

DOORS Main Door – Teak wood frame & shutter. Internal Doors – Sal wood frame and Flush door, PVC door for the toilet.

WINDOWS Anodized aluminum windows with grills.

FLOORING Vitrified tiles flooring with skirting in living/dining and all bedrooms. Anti-skid ceramic tile flooring in toilets, balconies, and utility areas. Paver blocks for car portico.

KITCHEN Granite countertop with ceramic tile dado up to 2 feet above the counter and stainless steel sink (Single bowl, single drain) Ceramic tile cladding in the wash area. Provision of the aqua guard water point.

WALL FINISHES All interior walls with a smooth finish and Acrylic emulsion paint over Birla / JK cement putty. All exterior walls with cement-based exterior paint of Apex or equivalent. Plaster of Paris / molding work in drawing and dining area.

TOILETS/ BATHS European WC’s washbasins of Hindware / Parryware or equivalent make. Provision for a shower in toilets.

POWER Concealed copper wiring of standard make. Power plugs in all necessary areas. Electrical fittings and fixtures of Anchor / Roma or equivalent make. Provision of points for the electric chimney, exhaust fans in kitchen bathrooms, air conditioners in rooms.

COMMUNICATIONS Telephone &Internet points in the living room. CABLE Provision for cable TV in the living room and all bedrooms.

For more details please click here or visit bhaskarproperty.com

Current Projects of One Realty Developers
Nirman Nagar Jabalpur, Kajarwara, Jabalpur

Projects Delivered by One Realty Developers
Aura City Jabalpur, Barela, Jabalpur
Nirvana City Jabalpur, Barela, Jabalpur
Gulmohar Greens Jabalpur, Barela, Jabalpur
Nirvana Exoticaa Jabalpur, Nirvana Exoticaa – Phase 1 & 2, Barela, Jabalpur

For more details please click here or visit bhaskarproperty.com

LEAVE A REPLY

Please enter your comment!
Please enter your name here