Retail Cos and Multiplex owners asks waiver of rent for lockdown period
Several real estate firms and mall owners have also confirmed receiving requests from retail companies operating from their premises to negotiate the rentals in such difficult times.
Their respective organisations, Retailers Association of India and Multiplex Association of India have also already raised the issue regarding the difficulties and challenges ahead once the 21-day long lockdown is lifted on April 14.
"We have received letters and emails from almost all retailers to not bill for the month of April. This is very normal as how to bill the space, when someone is not using the space," Select CityWalk CEO & Executive Director Yogeshwar Sharma told .
However, he also added that at the same time, mall owners have also not got any benefit as "expenses as salaries, maintenance etc are running. It's a tough situation."
When asked if the rental waiver request would be considered, Sharma said, "No one knows how long this would continue. There is no clarity on the issue as to whether all malls and cinemas would be allowed to operate or not. It would be premature to say anything about."
The real estate firms and mall owners have already received rentals for March, as they get rent in advance for the month.
Mukta Arts, which runs multiplex chain under the brand name ''Mukta A2 Cinemas' said that it is in discussion with mall owners over the unprecedented situation.
"We are certainly in discussions with all our partners about how we can best handle the situation in a difficult time for everyone. Our agreements do provide for Force Majure and we are considering every option," Mukta Arts MD Rahul Puri said.
Kishore-Biyani led Future Group, which owns and operates several retail formats which include popular Big Bazaar and neighbourhood food and grocery store chain, Easyday Club, has also approached the mall and property owners for waiver of rentals till the time, the business is closed.
Presently, complying with the government orders, retail companies are dispensing only essential items which include packed foods and vegetables and some of the FMCG products.
V-Mart, which operates stores mainly in tier II and III cities said it has also approached the companies seeking a waiver of the rentals and has plans to put rentals of the month of April on hold.
"We have also sent a request to our landlords and have communicated to them about the business conditions in such unusual times. We have told them that under the situation we cannot pay rentals of the lockdown period," said V-Mart Retail Chairman and Managing Director Lalit Agarwal.
He further said, "We would need their support even for the period after lockdown is lifted, as it would take some time to reach the normal footfall count at our stores. They would have to accommodate us on the rentals."
According to the Retailers Association of India, rent and salaries to employees make a large part of the cost of retailing firms which are facing challenges due to mandatory closure of the stores.
"RAI has retailers and mall owners as members. Our belief is that they should sit with each other and share the burden of the agreements because this is an unprecedented situation," said RAI CEO Kumar Rajagopalan.
RAI has asked the government to provide several rebates on taxes and others.
"Rental rebates would not happen unless there are some tax rebates and GST rebates. How can malls owners'' providers rebate to the retailer on hand while paying taxes on the other hand. Rental is an issue, where the retailers and the malls have to come together and sit on a table," he added.
Everyone is expecting the situation to be normalised soon, once the lockdown is lifted and their stores and multiplexes become operational.
Sharma, hoped that the situation would be normalised soon as "both are partners in the business. We have long term relations."
Pacific Group Executive Director Abhishek Bansal said: "Yes, we have received some request from few brands, but it is too early to gauge the actual impact. We need to wait for some more time to come to any conclusion."
Gaurs Group MD Manoj Gaur said: "We consider brands as our stakeholder and partner. Will try to help them to the extent possible, but it has been around 10 days only, so need more time to gauge the extent of losses. We also need to wait and watch the kind of relief measures that Government may announce for industry in coming days."
India is presently going through an unprecedented complete lockdown of three weeks, ending on April 14, to prevent the spread of coronavirus. KRH MRMR