News: Malls start charging full rentals, end concessions-17-02-2022
Unfair to charge pre-Covid rentals as some businesses have not become fully operational, say tenants.
Amid a rise in footfalls and a recovery in businesses, malls in various cities have started switching to original full rentals, ending the brief rental concessions they had given to their tenants during the peak of the third Covid wave in January, retailers and restaurants said. Pacific Malls in Delhi in January had charged rents from brands only for those days when the stores were open. But now the mall operator has switched to full rentals in February. "In January, if a brand was opened for ten days, we billed them only for those ten days and for restaurants we were doing a revenue-sharing," said Abhishek Bansal, director of Pacific Mall in west Delhi. "For February, the rents will be as per the contract." Similarly, 85% of the tenants are paying full rents in February said Nirupa Shankar, executive director of Brigade Group that runs three malls in Bengaluru. However, many brands are unhappy with malls rescinding rental concessions so soon as many of them are still not out of the woods. "Yes, rentals have returned to pre-Covid levels, but that's unfortunate," Zorawar Kalra, managing director of Massive Restaurants, which operates Masala Library and Farzi Cafe. "Restaurants and bars in a lot of places are still operating at 50% capacity because of statelevel curbs. So, if businesses are not back at pre-Covid levels, how can the rentals be charged basis full occupancy?" Mukesh Kumar, CEO of Infiniti that operates two malls in Mumbai, said his malls had given some "token" concessions to some food and beverage brands that he said was "only limited to January." Priyank Sukhija, promoter of First Fiddle F&B, which operates brands such as Lord of the Drinks and Warehouse, said: "Landlords have started asking us for pre-Covid rentals. It is okay to pay these rentals in markets where we have been allowed to operate without restrictions. But it is not possible to revert to pre-pandemic rentals in cities where operations are still restricted to 50% capacity." In late December and in January, when the third wave of the Covid-19 raged through India, footfall in malls in many cities had nearly halved with stricter curbs like weekend curfews and odd-and-even day opening of stores. Malls said footfalls have almost recovered to about 70% of pre-pandemic levels and they expect it to rebound fully in the next one month. "There is a steady recovery happening in the market at this point of time," said Ashish Dikshit, managing director of Aditya Birla Fashion and Retail that operates chains like Louis Philippe, Van Heusen, Allen Solly and Pantaloons.
