In a revelation that indicates increased retail consumption and an improved economy, CRISIL said that shopping mall operators across the country are expected to earn 7-9 per cent higher revenue during this fiscal. It further said that increased revenues are driven by strong retail consumption and improved rentals in their properties. “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 around 125 per cent of pre-pandemic, or fiscal 2020, revenue,” it said in a statement.
The rating agency said that the growth in revenue will be on a high base in FY23.
During the last fiscal, CRISIL noted that “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 around 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,” the agency said.
To make their findings more broad-base, CRISIL Ratings has analysed 28 malls, which have leasable space of around 18 million square feet area spread across 17 cities, with a total debt of over Rs 8,000 crore.
Generally, mall operators earn around 85 per cent of their income from minimum guaranteed rentals as per lease agreements, while the rest is generated through the revenue performance of tenants.
DLF, Brigade Enterprises, Macrotech Developers (Lodha Group), Nexus Select Trust, Phoenix Mills, Lulu Group, Pacific India, Unity Group and Ambience Group are operating Grade A shopping malls across major cities.