Real estate developers are cutting operational costs such as common area maintenance in order to reduce burden on retailers impacts due to the COVID19, according to industry experts.
Developers are also renegotiating their leasing arrangements and business models to sustain the momentum.
“The negotiations between retailers and investors have improved and increased significantly post-pandemic. At this juncture, it is extremely crucial for developers to earn the trust of customers and boost their confidence as their allies, especially in these testing times. Understanding the current market sentiments, we are not hesitant to go the extra mile to offer the best proposition at all times to our valued partners,” said Pankaj Bansal, Director, M3M Gurgaon.
At present, the company is offering a one-year revenue share.
“The sales in malls have reached 70-80% of the pre-Covid levels, and the businesses are booming. We are confident that we will witness promising results in the next few quarters,” Bansal added.
Elan Group that operates multiple retail assets in Gurgaon is renegotiating contracts with key brands to ensure a win-win partnership with its patrons.
“We are open to discussing the existing terms and conditions with brands and have also instituted flexible revenue sharing models to help them tide over the impact of the pandemic. The regaining pace of business activities has revived sentiment and will lead to the quick rebounding of the sector. Retail spaces are gradually regaining footfalls, albeit with health, hygiene, and wellness measures. We foresee the consolidation of the industry in favour of the organized developers who have an excellent track record,” said Ravish Kapoor, Managing Director, Elan Group.
Abhinav C Ajmera, President- Leasing, Omaxe Ltd., expects omnichannel shopping to be the norm in the post-pandemic world. While he said that restricted timings, especially in states such as Maharashtra, have been a deterrent to boosting sales, the upcoming festive season will set the pace towards recovery.
“As a result of a strong revival in consumer sentiments, shopping malls have registered a rebound in sales, reaching 50-60% of pre-Covid levels. Segments such as apparel, food, supermarkets etc., have witnessed good growth. Renegotiations and waivers were agreed upon on a case-to-case basis during the first wave of the COVID-19 pandemic, and owners and tenants have agreed to be accommodative in their joint efforts to bring footfall and spur spending,” said Abhinav C Ajmera, President- Leasing, Omaxe Ltd.
Omaxe Ltd. is executing Omaxe Chowk at Chandni Chowk, New Delhi, through its subsidiary Omaxe Heritage Pvt. Ltd. in collaboration with North Delhi Municipal Corporation (NDMC). The project is conceptualized as a one-stop retail destination and will give a major facelift to Chandni Chowk.
“The pandemic situation leading to prolonged closures have left both malls and retailers under tremendous financial stress. We are therefore working out mutually beneficial solutions to have a win-win situation for both – the mall and our tenants. We have accordingly worked out appropriate concessions keeping in mind the category of the brand, state of the business during the lockdown period – whether open for food deliveries, e-commerce or totally shut,” said Sachin Dhanawade – Chief Operating Officer (COO) Retail & Real Estate, Grauer & Weil (India) Limited, which operates Growel’s 1O1 Mall in the Kandivali suburb of Mumbai.
The tenure of concessions are also basis the expected bounce back of the businesses benchmarked to reopening last year, completion of both doses of the vaccination for staff and as well as customers target group for the brand/category considering the under 45 population will be fully vaccinated before the festive shopping season.
Nandini Taneja, Vice President, Leasing, Reach Pro Group, that operates two retail spaces in Gurgaon said that the customers are now moving toward high-street.
“Earlier, of the total retail leasing, only 30% used to happen in High-street but the trend has reversed post COVID. Not only it offers open spaces, maintenance cost at high-street is comparatively less than malls. Developers and retailers have worked together to come out of the crisis and we will always support each other,” Taneja said.
Source : ET
