Commenting on the fresh restrictions after the second wave of infections, the agency said the curbs will affect retail sales but the debt servicing capability of the malls is not likely to be impacted because of strong sponsors and healthy liquidity profiles.
"We foresee retail sales in malls declining significantly in the first quarter of this fiscal versus pre-pandemic levels because of fresh restrictions, and recovering gradually by the end of the first half," its senior director Anuj Sethi said.
Retail sales are expected to be 90 per cent of pre-pandemic levels for the second half of this fiscal, which may not warrant rental waivers, he added.
This would minimise the impact on rental income of mall owners, he said, adding that accelerated vaccinations are crucial to retail sales revival, especially for non-essentials.
The agency said the recovery in retail sales will not be uniform, and malls in Maharashtra, which account for 35-40 per cent of the revenue in the agency's universe of 14 rated malls, will be impacted the most because of the mini-lockdowns currently in place.
It said overall retail sales at malls declined 55 per cent in FY21 and although closures in the first half had a significant impact, gradual recovery after reopening provided an offset in the second half. However, footfalls remained considerably lower than pre-pandemic levels, but average spend per footfall darted up more than 25 per cent.
Most tenant categories, including apparels, cosmetics, electronics, luxury, and food and beverage, saw a 70 per cent recovery in business by the end of last fiscal as compared with the pre-pandemic levels but cinema and family entertainment centres continued to lag and may get some reprieve from mall owners.
Cinema and family entertainment contributes 10 per cent of the revenues for the malls.
From mall owners' perspective, cost rationalisation decreased the impact on operating profitability, which is estimated to have contracted only 3 percentage points to 65 per cent last fiscal on-year for the sample set despite a sharp drop in revenue, it said.
The agency said mall owners were able to cut costs by 40 per cent, supported by lower utility expenses during lockdowns and optimisation of manpower, part of which might continue.
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