Retailers appeal to mall developers to modify rental agreement

Currently large retailers and small business owners are facing the wrath in terms of rental payments amidst corona outbreak. The retailers appealed to mall developers to switch to a revenue-sharing agreement to mitigate the loss till the end of December.

Mall developers said they were in talks with tenants, however were yet to reach any conclusion as things are uncertain owing to the countrywide lockdown.

With the lockdown likely to extend soon, non-food retailers are slogging out with zero revenue, anticipating a scenario where net profits will take months to recover and result in dead capital.

“It’s an appeal to mall developers, to landlords to come and work together on how to restructure and rescue the retail business as we come back to the post-covid-19 world. We hope that things will get better over the next three to four months, and take another three to four months to return to normalcy,” said Rakesh Biyani, joint managing director, Future Group.

Pankaj Renjhen, chief operating officer, Virtuous Retail, which operates several malls in India said For malls, rentals are the only source of income. And the costs are fixed, such as loans, assets, LRD on books—and a lot relies on rentals. “We have to pay property tax and pay statutory dues, such as minimum electricity bills, and even pay to some of the housekeeping staff, “ he added.

Malls are yet to take a decision in the lockdown period and are waiting for a clarity from the Prime Minister before venturing into future course of action, said Amitabh Taneja, founder chairman, Shopping Centres Association of India.