CRISIL: Mall revenues to remain low despite rise in toplines

Ratings agency Crisil expects malls revenues to remain lower than their pre-pandemic levels despite a healthy rise expected in their toplines this fiscal .

The report states, shopping malls' revenue is likely to grow by 45-55 per cent in FY22 after the 45 per cent dent in the previous fiscal due to the lockdowns.

Topline is likely to remain at 80-85 per cent of pre-pandemic level. Curbs to control the second wave will affect retail sales but the debt servicing capability of the malls is not likely to be impacted because of strong sponsors and healthy liquidity profiles, says the report.

Retail sales are expected to be 90 per cent of pre-pandemic levels for the second half of this fiscal, which may not warrant rental waivers, says Anuj Sethi, Senior Director, Crisil..

This would minimize the impact on rental income of mall owners, he said, adding that accelerated vaccinations are crucial to retail sales revival, especially for non-essentials.

The agency said recovery in retail sales will not be uniform, and malls in Maharashtra, which account for 35-40 per cent of the revenue in the agency's universe of 14 rated malls, will be impacted the most because of the mini-lockdowns currently in place.