Retail Estate: The Post Pandemic Road To Recovery

Growel’s 101 ran a customer survey campaign with its Loyalty Program members as an engagement initiative and also to understand customer expectations on re-opening of the mall…

- Sachin Dhanawade

As the COVID-19 outbreak grips the nation, the Indian retail real estate market, in particular, has been hit hard, with consumption sentiment weakening and regional tourism experiencing a shutdown. This, in turn, is expected to have an adverse impact on economy.

In order to rejuvenate the retail sector, the Government will have to take the backseat on fiscal prudence & take bold steps to ensure that this sector does not stunt.

Here’s my understanding of the impact and the fastest road to revival:

Impact on Retail Real Estate

Retail real estate owners will be staring at a challenge of retaining present tenants and leasing out new spaces. There is also a possibility that existing tenants due to limited or no income in the past months may look at resizing or venture into alternate businesses for survival. In this case it is imperative that we work closely with such tenants and ensure business continuity post lockdown.

For most mall owners if rents go down their loans towards the banks will be under strain. With the current position of retail real estate, it will be difficult for them to generate the necessary revenue. Hence it is critical that the tenants as well as the mall owners look at the current situation from both ends and plan their discussions appropriately.

Malls under construction are expected to face a delay of a few months due to the stoppage of construction during the lockdown. It is also quite likely that developers may take a call to scrap malls that are in the initial stages of construction and think for alternate business to get the desired returns. In my opinion, healthcare would be a good alternate as it is now the need of the hour.