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Shopping malls across India are seen reporting 80-86% of pre-pandemic recovery in revenues during the current fiscal, a report by CRISIL Ratings showed.

The report highlighted the severity of the current second wave as a concern for malls that are facing closures in several parts of the country.

The country’s capital Delhi recently ordered malls to shut down till end of April, while Maharashtra is observing a strict curfew which has barred non-essential centres from opening.

CRISIL noted that malls need a strong sponsor support, and liquidity to sustain credit profiles.

According to the report, in the financial year ended Mar 31, 2021, shopping malls in the country are expected to see a 45% decline in revenues.

Continued negotiations between malls and tenants amid the second wave, and inability of retailers to generate sufficient sales is likely to drag them down, the report noted.

“Revenue of shopping malls is foreseen growing 45-55% this fiscal after an expected 45% decline in fiscal 2021. That will still be 15-20% below the pre-pandemic levels because of continuing waivers for some under-performing retail segments and the possibility of fresh waivers across segments due to mobility curbs following the second wave of the Covid-19 pandemic,” CRISIL said.

The report was based on an analysis of India’s top 14 shopping malls.

“We foresee retail sales in malls declining significantly in the first quarter of this fiscal versus pre-pandemic levels because of fresh restrictions and recovering gradually by the end of the first half,” Crisil Ratings Senior Director Anuj Sethi said.

Rental waivers could continue till the first half of the year, the report noted.

Retail sales are expected to be 90% of pre-pandemic levels for the second half of this fiscal, which may not warrant rental waivers, Sethi added.

That would minimise the impact on rental income of mall owners. Accelerated vaccinations are crucial to retail sales revival, especially for non-essentials, Sethi said.

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