Mall retailers put rent concessions back on table

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Mall retailers put rent concessions back on table

Large retailers and restaurant chains have started discussions with malls and landlords for rental concessions, as weekend curfews and late evening curbs severely dent businesses, executives said.

“We have written to landlords and mall owners to renegotiate rentals; 70-75% of our business comes from weekends and dinner, which is gone,” said Rohit Aggarwal, director of Lite Bite Foods, which operates Asia 7, Punjab Grill and The Artful Baker. “We expect business to be impacted all through January-March.”

Many such as Benetton, Jack & Jones-retailer Bestseller Retail, Vero Moda, Only, ethnic retailer Biba and Forever New have either begun informal discussions with malls and landlords for rental concessions or said they would do so in the coming weeks.

Footfall in malls has nearly halved in cities with stricter curbs, such as Delhi-NCR, executives said on Friday, adding that they expect further drop to 70% over the weekend, with imposition of curfew.

“We will need to approach all our landlords and find a right solution,” said Siddharath Bindra, managing director of Biba. “We are fairly confident most people (landlords) will take a proactive view. Business is dropping every day.”

On Friday, the National Restaurants Association of India – led by Azure Hospitality cofounder Kabir Suri, Jubilant FoodWorks chief executive Pratik Pota and Wow! Momo Foods cofounder Sagar Daryani – wrote to landlords and major mall owners across India, citing “commercial concerns” in the wake of disruptions caused by the Omicron-led third wave of the pandemic.

The restaurateurs have sought complete waiver of rentals and common area maintenance in case businesses are completely shut for dine-ins, pure revenue share for the period when restricted operations are imposed, and no minimum guaranteed rents for three months after reopening.

“While we are not aware how long the third wave (will last) and consequent restrictions of occupancy, timing and curfews remain, business will take some time to normalise once we are out of the grip of the third wave,” said Suri, who is also president of NRAI.

Room for Negotiations


Executives at malls and landlords said they would wait at least another week to 10 days before committing to concessions they could give retailers. They said they have not yet generated rental bills for January, leaving room for negotiations with retailers and restaurants.

“We are always with retailers but it’s too early. If the cases go up and the condition turns worse, then obviously we have to give some relief, but it depends on how severe the third wave is,” said Harsh Bansal, head of Unity Group, which operates four malls in Delhi.

Bansal said footfall is down, with no cinema screenings or entertainment, and shops are open on an odd-even basis in large markets like Delhi, leading to footfall reducing by 35-40% and business down to almost half.

“There will be concessions for sure but what kind of concessions we are going to offer is not decided yet,” said Abhishek Bansal, director of Pacific Group that operates three malls in Delhi. “I am waiting for 7-10 days to see how things pan out and then will decide on what kind of discounts we can offer.”

Covid Clause


After the second wave had subsided, many large retailers and restaurant chains such as Reliance Retail, Aditya Birla Fashion, Jubilant FoodWorks and Lee had begun incorporating clauses in new leases that they will not pay rents – or pay only in proportion to their actual businesses – in the event of any government orders for closures of stores and malls.

However, a lot of these were short-term and on only a few leases, executives said. “Many concessions were not binding to any of the parties. Also, no one predicted that despite such a strong vaccination drive, a third wave would be imminent,” said Zorawar Kalra, managing director, Massive Restaurants. Kalra’s company operates Masala Library and Farzi Cafe, among others.

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