In an exclusive interaction with Shopping Centre News Bureau, Manoj K. Agarwal, Chief Executive Officer, Viviana Mall spoke about shopping centres in COVID-19 times, while elaborating on the measures taken by Viviana mall to make it customer-safe post the lockdown period.
What are retailers and shopping centres doing to stave off the ill effects of the pandemic and reassure consumers? Will you shift to a revenue-sharing model with your tenants?
Ever since the outbreak of COVID-19, Viviana Mall has initiated several precautionary measures to ensure a hygienic and uncontaminated public space for our shoppers. While Viviana Mall’s management has always given top priority to cleanliness and will continue to do so, we have initiated regular deep cleaning of the entire premises other than the mandated sanitisation drive. We will continue deep cleaning and sanitisation of all areas in and around the mall before we reopen and thereon. We have made this an integral part of our current ‘Standard Operating Procedures’.
We have already procured specialised equipment like steam cleaners and body temperature scanners as well as we have indigenously developed sanitising equipment for area fumigation, goods received and for people walkthrough. We are also in the process of finalising additional equipment requirements for use during the shopping centre trading.
In addition to this, based on a wide variety of sources including – Shopping Centres Association of India (SCAI) – we are developing detailed SOPs and guidelines for customers, retailers, F&B Operators and Food Court as well as for own staff and shopping centre management office. To instill a sense of confidence in the customers we are regularly posting videos and clips on our social media of the various cleaning, sanitising, training and maintenance activities being carried out at the shopping centre.
Under the given circumstances, the shopping centre management has decided to be governed by the terms of the individual agreements. We have received communications from various categories of retailers on this subject. These are being evaluated in the light of the agreed terms with individual retail partners as well as their performance over the years. However, this is the time to together battle and control the novel coronavirus spread as well as to get ready together to open the shopping centre for our valued customers at the earliest based on the government’s guidelines. Commercials and business needs would have to be taken up at an appropriate time.
Will you consider rental waivers till the situation improve?
Any decision on relooking at rentals would be governed by the terms of the respective agreements as well as the category-wise individual retailer performance over the years in the
shopping centre as well as their future potential and prospects.
How are you dealing with retailers for issues like Common Area Maintenance (CAM), electricity, and other maintenance costs?
We have already drastically cut down on our day-to-day CAM
expenses and our team was very proactive in rolling out these
measures. As we have a rooftop solar installation, we have been
able to cut down the electricity costs significantly. MSEDCL has also come out with an interim relief for its consumers across
segments. That also helps in a big way and we are thankful to them. We expect some further support from them for the coming period. SCAI is already working on this for all the member shopping centres.
There has been no vendor movement due to the lockdown. We are doing all the maintenance activities in house, under the
guidance of our maintenance chief and his team. Here, we have made sure that along with a revised schedule for Preventive
Maintenance of all equipment, we have also worked out a daily operating schedule across departments for various types of mechanical equipment that are there in the shopping centre. This is with a view to keep them in readiness for operations when
the shopping centre starts trading again.
There have been proposals of waiving retailers’ rent, but shopping malls have to pay installments to banks. How are you dealing with this situation?
As mentioned earlier, we would evaluate relooking at rentals at
the appropriate time based on the norms mentioned above already. Our bankers, as per RBI guidelines, have already passed on the benefit of the announced 3-month moratorium to us. This combined with the proactive reduction in day to day expenses and outflows by our team has eased out our cash flows
considerably. We are hopeful of further support on this from the concerned authorities in the coming period.
As malls were completely shut and there is no revenue, how did you cope with the mandatory municipal property tax, electricity board monthly fixed charge, GST payments and interest rates?
The GST concessions in terms of deferred payments have already been passed on. This helps us a great deal again. As regards, the property tax, we would need to pay this as per the payment norms of Thane Municipal Corporation. Though, we are hoping for some further support from them. The MSEDCL has also come out with an interim relief for its consumers across segments. We would expect some further support from them as well. Interest rates are as yet are unchanged and need to be dealt with as we do normally. We hope some reduction in interest rates may be announced in the coming time.
What kind of support are you seeking from the government in this crisis situation?
We would be happy if we were to get the following support
from the Union and State Governments:
– EB boards / DISCOMS to charge based on units starting from March 2020 till such time things the trading commences. Till operations start, these charges to be deferred without interest & not collected. We would also seek an LT rate instead of the usual HT rate for the duration of the lockdown period.
– Statutory authorities to defer collection of dues like Property taxes for the next 1 years without any penalty.
– Bankers to extend the moratorium for shopping centres for the next 6 months or till the end of lockdown whichever is later and to rejig the loan term accordingly as well as amortize the interest
on interest across the entire revised loan term.
– Bankers to bring down an effective rate of interest including the interest on interest by 30 percent for FY 2020-21.
– With mandatory operating guidelines, allow shopping
centres including its restaurants, food court entertainment centre and multiplex to be allowed to open first on priority when lockdown exit starts in the particular shopping centre location.