Last updated : March 25, 2020 10:52 am
Governments have ordered complete shut-down of shopping centres, malls, multiplexes/cinema halls amid coronavirus scare. Retailers and Malls have already started feeling the heat of the lockdown. A roundup of how the mall owners are reacting to the Covid-19 threat
Following the Covid-19 outbreak, the overall industry is collectively facing challenging times with many state governments directing malls & other public spaces and facilities to shut down. From shoppers’ cautious approach to financial crunch, mall owners throw light on the various challenges thrown by the coronavirus pandemic and measures adopted to curb business losses.
Impact of Covid-19
Monetary Loss
He further adds, “The rental income has come down to zero since the closure of malls. Unlike all other businesses, they do not have any goods or merchandise to sell or reduce inventory holding or other such measures, which other industries can take. Their Collections have completely dried up during this period, while they continue to bear a high fixed cost towards Personnel, Utilities and ongoing routine expenses”.
Challenges Ahead
“Also, upcoming malls under construction will suffer delays due to slow/shut down in countries like US, UK ,Italy and China. Manpower at sites have also drastically fallen due to this outbreak. All this will cause a delay in opening the new malls. So, the need of the hour is a moratorium in delaying the repayment of loans and extending the period for taking the benefit of loans granted for the projects”, adds Philips.
Measures Undertaken
The Shopping Centres of India (SCAI) on behalf of its members and also non member malls has sought appointments for personal meetings with concerned authorities to discuss following measures to help shopping centres sail through this challenging phase:
· Allow a moratorium period during continuation of Pandemic, in repayment of bank loans, interest, EMI, etc. without levy of any penalties including penal interest. Further, one-time loan restructuring with lower rates of interest may be permitted for shopping centres.
· Provide short-term financing option for a period of 6 to 12 months, at lower interest rates to meet the increased working capital requirements.
· Grant GST rebates to offset the losses on account of and for the period of closure of business and/or in the alternative permit flexibility in deposit of Goods and Services Tax (GST) since GST needs to be deposited immediately upon raising of invoice, however, corresponding payments are likely to be delayed, resulting in an additional cash flow burden on shopping centres.
· Provide relief so that credit rating of shopping centres is not adversely affected due to delays in repayment of bank loans, interest, EMI, etc.
· Issue appropriate directions to the Insurance Regulatory and Development Authority (IRDA) to include insurance against loss of profits on account of epidemic – which is not currently included in the policies.
· Any other relief which may be deemed fit in the present scenario.
“The implementation of these measures can immensely help the shopping centres and industries referred hereinabove. Once the country is free from the virus malls that have emerged as the most vibrant social spaces for Indians to celebrate their leisure time will play a critical role to bring back life and uplift sentiments of the masses. Hence, it is all the more important to ensure that necessary support is provided to the shopping centre industry to cope up with the challenge and be ready to welcome visitors once the restrictions are lifted”, shares Taneja.