DLF considering rental waiver for retailers

Leading real estate firm DLF said it is considering waiving store rentals in its shopping malls for the period of the recent lockdown to provide relief to retailers, just as it did in the wake of the first wave of Covid-19 which had led to a nationwide shutdown from March last year.Industry executives said retailers are hoping that other mall operators would emulate DLF and extend a helping hand following the deadly second wave of Covid-19, although business is expected to recover faster this time than it did after the lockdown last year. Negotiations between mall operators and tenants on rental waivers for the lockdown period have begun as most of the states have allowed reopening of malls, they said. “Last year, DLF had taken an industry leadership position by not charging rent from the retailers for the lockdown period. We are considering a waiver for the lockdown period this year too and will be finalising before the end of the month,” said Sriram Khattar, managing director of the rental arm of DLF which operates six malls and other retail assets across the country. The Shopping Centres Association of India (SCAI) has recommended that its members work out mutually beneficial deals with the tenants.“Both parties should thrash out a win-win deal. Extension of any waivers or discount is a decision of individual malls. The past 14-16 months have been difficult for retailers and developers and it has impacted both of them equally,” said SCAI chairman Mukesh Kumar.Last year, many mall operators, apart from offering rental waiver for the lockdown period, had offered partial relief for a few more months. However, this year most of the malls are not expected to offer any other relief apart from partial or full rental waiver for the lockdown period. “We are in discussion with retailers and there will be some relief, which will be finalised by next week,” said Yogeshwar Sharma, chief executive, Select Citywalk. “We are of the opinion that this time some pain has to be shared as we expect recovery will not take long like the last time. The relief will be different for every shop as some need more support than others.”Malls started opening in Delhi and Haryana from the first week of June, with some restrictions, while Uttar Pradesh has allowed malls to open from June 21. Malls in Mumbai and Bengaluru have yet to reopen while malls in Navi Mumbai reopened on June 7 and in Pune on June 15.“We will follow the same approach as we did last year. When there is visibility of each mall opening up, that’s the point when the stores start to commence trading. Once they start, then we will enter into commercial negotiations and arrive at an understanding,” Shishir Srivastava, managing director at Phoenix Mills Ltd, had told investors in the last week of May. Mall owners have incurred a loss of about Rs 3,000 crore, according to industry estimates, during the ongoing second wave of Covid-19 over the past eight weeks due to lockdowns and restrictions imposed by various states across the country. While some of them have already extended full or partial rental waivers to retailers, they have to bear fixed costs even as they have hardly any income from rentals. “The management is in the process of working out on rental models and is in discussions with the retailers,” said Gurvineet Singh, CEO, Viviana Mall in Thane.

from Economic Times https://bit.ly/2SFkUtF
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