Shopping malls report losses to the tune of Rs 3,000 crore due to lockdowns
The Shopping Centres Association of India has urged the government to extend the moratorium on loans and indicated that the industry might see NPAs if the restrictions continue for another month.
May 28, 2021 / 04:18 PM IST
The Shopping Centres Association of India (SCAI) on May 28 urged various state governments to allow reopening of malls in the second phase of unlocking . The collective call from the industry came as Delhi, which has been under lockdown since April 19, announced its unlock process will begin from May 31. Shopping malls along with gyms and swimming pools are to remain shut in this phase.
According to the association, the industry has incurred losses to the tune of Rs 3,000 crore in the past eight weeks since the lockdowns were imposed by various state governments including Delhi and Maharashtra.
“We hope the state governments will wait like last time to reopen shopping malls by the fourth or fifth unlock phase and allow reopening in the second phase itself this time,” Mukesh Kumar, Chairman and Director on Board, SCAI told reporters on Friday.
He also warned that the banks could be staring at loans turning non-performing assets (NPAs) from the industry if the restrictions continue for longer.
To deal with this crisis, shopping malls have sought an extension on the moratorium on their loans from the Reserve Bank of India. Most malls have received financing from the banks through the LRD scheme or Lease Rental Discounting scheme and use the rentals from their tenants to pay EMIs every month. Given the low to nil rentals that are coming their way currently due to COVID-19 induced curbs, shopping malls are in a tight spot.
SCAI has also asked for other relief measures such as payment deferment to the power companies and an extension on the renewal of existing permits, licences.
As per SCAI, currently, there are 650 large and 1,000 small shopping centres in the country, which support 12 million livelihoods directly and indirectly. These employees are associated with malls, retail, and manufacturing retail, it says. A report released by the Shopping Centres Association of India (SCAI) in April 2020 has said that about 25-30 percent of jobs in the industry were impacted last year due to restrictions. By mid-March, however, 70-75 percent of employees had re-joined.