Phoenix Mills, in the listed space, and Blackstone-owned Nexus Malls, in unlisted space, are the largest mall operators.
"If malls are shut for a month, 30 per cent of their revenues in the first quarter is gone," a Mumbai-based analyst said, adding that even if malls are open and footfalls reduce, 10-20 per cent of revenues will be hit since the malls and retailers are on 'revenue sharing' model. He said mall owners could extend lease agreements with retailers for a short term and extend it after consumption picks up.
The analyst said since servicing of principal and interest on loans will become challenging for mall operatos in the next couple of months.
However, Shishir Shrivastava, managing director of The Phoenix Mills, said such closures will have short-term impact. "Losses for one month can be easily recouped. Between now and the next 12 months, consumption will pick up," he said.
Mukesh Kumar, chief executive at Mumbai-based Infiniti Mall, also said the closure was a temporary disruption.
While ICICI Securities said 50-60 per cent space is up for renewal across Phoenix Mills’ High Street Phoenix and all Market City malls over FY20-22, Shrivastava said the current issue won’t have an impact on rent negotiations and renewals.
Anupam T, an independent mall consultant, said since demand for space is more than supply in metros, rentals are unlikely drop in the near future.
Meanwhile, Shopping Centres Association of India asked the government on Thursday to allow a moratorium period in repayment of bank loans, interest, and equated insallments, without levy of any penalties, till the time the pandemic is affecting businesses. Further, one-time loan restructuring with lower rates of interest may be permitted, it said. The association also sought short-term financing option at lower interest rates to meet the increased working capital requirements and goods and services tax rebates to offset the losses.