Most mall owners agree to retailers' rental terms

Most mall owners agree to retailers’ rental terms

NEW DELHI: In move that signals the end of the row over new rental agreements between mall owners and retailers due to Covid-19, nearly all malls across India — barring one or two — have agreed to the terms and conditions that retailers have put forward.

This will result in these retailers and restaurateurs, with around 300 brands among them, to open all their outlets in over 600 malls, albeit in locations where malls are allowed to operate.

Earlier, top retailers — including Levi’s, Bata, Tommy Hilfiger, Calvin Klein and Madura Garments — refused to open stores at malls as their demands of a full waiver along with further restructuring of rent through revenue share and reduction in minimum guarantee for six to nine months were not met.

“We have found a collaborative and satisfactory settlement with almost all landlord partners on both high streets and malls,” Sanjeev Mohanty, MD – South Asia, Middle East & North Africa, Levi’s, told TOI.

Rakesh Biyani, MD of Future Retail, said the mall owners’ response has been strong. “Like I mentioned earlier, it has to be a collaborative effort by both parties. Sales, however, are currently 25% of what they used to be before Covid-19 and footfalls are very low,” he said. “We need to be able to create demand now to be able to sustain and survive.”

The move by mall owners came after DLF Shopping Malls took the first step to waive the minimum guaranteed rent for the lockdown period till June 15, while sharing new rent and revenue sharing slabs meant to expedite the opening of eateries.

Other large mall groups, including Inorbit and Nexus, followed suit. “Over 95% of retailers across all our malls that are open have resumed operations. I am happy things are slowly returning to normal,” said Rajneesh Mahajan, CEO at Inorbit Malls.

Dalip Sehgal, CEO, Nexus Malls, said, “There was a shared understanding of the issues and challenges being faced by the industry and, as a result, we have reached mutually acceptable agreement with our partners. As of now, more than 85% of area is operational from the categories that are allowed to be open.”