RIL’s Reliance Brands and Reliance Retail serve termination notices for stores in Nexus malls
Reliance Industries Limited’s Reliance Brands and Reliance Retail have terminated numerous rental leases for stores they operate in Blackstone-owned Nexus malls following a failure to agree on rent rates during lockdown.
Reliance Retail and Reliance Brands Limited have terminated leases in nine Nexus malls across India in cities including Pune, Mumbai, and Ahmedabad among others, three sources told ET Bureau. This decisive action by RIL will no doubt send a signal to malls and brands alike in the ongoing discussions concerning rent for stores in malls.
“Nexus hardened their stand saying they will adjust the rents [for months during lockdown] from security deposits,” an anonymous source close to the matter told ET Bureau. “There were further discussions between the two groups that failed to reach a compromise. At that point, Reliance Retail sent termination notices.”
Malls shut on March 25 as the nationwide lockdown began and some had shut even earlier. Most malls still remain closed under the extended lockdown regulations even as many ‘non-essential’ stores reopen on high-streets.
Most malls have been deemed too great a risk for spreading coronavirus thus far to reopen. Some malls are redesigning their interiors to allow for social distancing in hopes on reopening soon.
Stores operating in malls have faced zero income for over two months and many businesses are struggling to pay rent. Although some malls have offered reduced rates or other flexible options for the time period, many have cited their own financial commitments to banks as the reason they cannot reduce rent rates during lockdown.
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