The Buoyant retail sales and improved rental yields are expected to lift the revenue of mall operators by 7-9 per cent this fiscal. That would be tantamount to ~125 per cent of pre-pandemic, or fiscal 2020, revenue.
Notably, this will be on a high base of fiscal 2023, when a return to social normalcy after mobility curbs were lifted led to substantial growth in footfalls and a robust 60 per cent rise in revenue to ~116 per cent of the pre-pandemic level.
Additionally, high occupancy levels, solid profitability backed by cost-optimisation measures and strong balance sheets will keep the credit risk profiles of mall operators healthy this fiscal.
A CRISIL Ratings analysis of 28 malls1 indicates as much.
Mohit Makhija, Senior Director, CRISIL Ratings stated, “Robust retail sales will help mall operators increase revenue in two ways. One, occupancy of ~95 per cent will translate to better rental rates for new leases. Two, 10-15 per cent of the revenue of mall operators is linked to retail sales via revenue share income, which will increase this fiscal. Additionally, operators will get contractual rent escalations of 4-5 per cent as well.”