'Rental income of 23 malls in 9 cities may fall 24 pc in Q4 to around Rs 300 cr due to COVID-19' 

The pre-COVID-19 peak rental income for ICRA's sample (23 malls) was at around Rs 470 crore in Q3, of FY20.

Published: 25th January 2022 06:37 PM  |   Last Updated: 25th January 2022 06:37 PM   |  A+A-

A few visitors at a mall in Mumbai. (Photo | PTI)


NEW DELHI: Rental income of 23 shopping malls might decline 24 per cent to around Rs 300 crore during the January-March 2021 period as compared with the previous quarter due to the COVID-19 pandemic, according to rating agency ICRA.

The estimate is based on the sample of 23 malls, covering 14.2 million square feet, across nine states, it said.

The rating agency pointed out that footfalls and businesses in malls have declined this month due to the restrictions imposed by various state governments to curb the spread of the Omicron variant of coronavirus.

When contacted, ICRA Sector Head (Corporate Ratings) Anupama Reddy said the rental collection of these 23 malls could drop by 24 per cent from an estimated Rs 400 crore in the previous quarter.

"The pre-COVID-19 peak rental income for ICRA's sample (23 malls) was at around Rs 470 crore in Q3, of FY20," she told PTI.

Reddy pointed out that the rental income of these 23 malls fell to Rs 85 crore in the first quarter of the financial year 2020-21 due to the nationwide lockdown during the first wave of the COVID-19 pandemic.

With the easing of restrictions along with a decline in the fresh infections, she said there was a gradual improvement in the rental recovery in the third and fourth quarters of FY2021.

Rentals income stood at around Rs 355 crore (82 per cent of pre-COVID-19 rentals) in the fourth quarter of the financial year 2020-21.

"However, the second wave of the pandemic in April-May 2021 again resulted in the closure of malls for about two months due to state-wise restrictions and the rentals declined by 62 per cent q-o-q to around Rs 135 crore in Q1FY2022," she said.

With faster relaxation in the restrictions and improved vaccination coverage, Reddy said the recovery was faster after the second wave, resulting in estimated rentals at around Rs 400 crore in the third quarter of this fiscal.

"The Omicron-led third wave of the COVID-19 pandemic from January 2022 onwards has resulted in the resurgence in fresh COVID-19 cases leading to restrictions by various state governments impacting the rental income, which are expected to decline by 24 per cent q-o-q (quarter-on-quarter) in Q4FY2022," she said.

Reddy also pointed out that the business in value terms during the current quarter could decline to 60-70 per cent of pre-COVID-19 levels.

The footfalls in the malls are witnessing a declining trend from the first week of January 2022 with restrictions in major cities such as closing dine-in for restaurants, occupancy restrictions for multiplexes and their closure in a few cities along with weekend curfews.

Reddy said recovery after the third wave is expected to be faster than the previous waves with short-tenured restrictions and expected quick ramp-up for major tenants, including multiplexes.


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