Mall revenue not expected to recover by FY22 end as Covid-19 continues to affect industry
Despite measured recovery, Indian malls are not expected to recover to pre-pandemic revenue levels by the end of the current 2022 financial year, with Maharashtra malls facing some of the steepest challenges.
Mall revenue as a whole is expected to return to around a fifth lower than its pre-coronavirus levels by the end of FY22, according to a new report by ratings agency Crisil, accessed by the Press Trust of India. Mall revenue should grow by between 45% and 55% this fiscal, following a 45% revenue drop in the 2021 fiscal year amid lockdowns and restrictions, Crisil said.
Even at the end of the current financial year, malls will most likely achieve only 80% to 85% of their pre-pandemic revenue, according to Crisil. Mall owners have been able to cut costs with reduced utilities and optimised manpower and segments including apparel and beauty have seen a greater recovery than mall multiplexes and family entertainment centres.
Many malls faced restrictions and reduced business hours long after high streets reopened in 2020 and many brands with store in malls had to request rent reductions in the face of months without sales.
As local lockdowns come into force once more, many malls face an uncertain few months. However, despite malls facing another blow to retail sales, their debt servicing capability is unlikely to be impacted due to strong sponsors and healthy liquidity profiles, according to Crisil.
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