The impact of COVID-19 and the ensuing lockdown on both the shopping centre and the retail industry has been extremely serious and challenging. In the last four months, not only India, but the entire world has been affected by this black swan event, leading to an economic crisis situation globally, as several other sectors are feeling the same pressure and on verge of collapse due to lack of business, debts and revenue losses.
The mandatory closure of the shopping malls for a period of over two months was a huge setback for the industry. The
industry, which runs on crowds and footfalls, is still trying to deal with the new set of norms which is a totally new task as
the pandemic continues to spread its reach pan India. The government and authorities are trying their best to flatten the curve, but the success rate is limited as of now.
Impact on Real Estate Sector in India
Talking about the situation of the real estate sector in India, Dr. Vishesh Rawat, Vice President – Sales & Marketing, M2K Group says, “The real estate sector, especially commercial real estate has been hugely impacted by the lockdown and the unlock situation in phases. With various limitations and measures, it is very challenging to get back the confidence of the consumer and to make him return to public places like shopping malls. The response so far has been good, but people are still scared as there is no respite and the number of positive cases are increasing every day.
Two of our properties M2K Rohini and M2K Pitampura are cinema centric properties and have been impacted due to the temporary closure of multiplexes due to pandemic. However, construction activities at our under-construction projects have been restored and we are making good progress there.”
Upcoming Malls: Challenges in COVID Times
As thousands of migrant workers and labourers left the metro cities for their villages, construction of malls and other commercial properties took a huge blow in the lockdown period. Despite the government’s permission to start construction, many builders and mall developers are still dealing with this labour shortage dilemma.
“We were lucky that the major share of our manpower has been with us during the lockdown. We made arrangements for their stay, food and provided medical facilities to labourers and thankfully they are with us and working at the sites. Full safety measures are being taken at the operational properties,” says Dr. Rawat.
Leasing is another aspect which is very important for any upcoming mall. If the mall doesn’t get good brands, it won’t survive in the future. During the lockdown, when most shopping malls and retailers were having a tight spot for the rental waiving and other monetary disagreements, selling new space to any brand was quite testing.
“We consider the retailers our business partners and stand with them in these tough times. For many retailers opening new stores is not the priority right now. However, we are getting inquiries from grocery stores, electronics retailers and testing labs as of now. Things are slowly coming back on track and the revenue from sales in ready to move-in properties is coming back to the pre-COVID levels. This is a very positive sign for both real estate developers and retailers,” he added further.
Consumer Behaviour & New Retail Mix
It has been almost a month since shopping malls have re-opened their doors for consumers after the lockdown in most parts of the country. Though malls are getting a good response, but the consumer today is not confident and is also not getting the retail mix of his choice, the choice which has changed in keeping with the pandemic. While mostly shoppers are buying essential items, there have been cases of revenge and non-essential buying as well. However, shoppers are still worried about their health for now, venturing out as little as possible.
“Non-essential shopping and dining out are on complete hold for a large section of consumers. Shopping is part of human nature and I believe once the curve of the pandemic goes downwards, people will come back to shopping malls in higher numbers. A modern shopping centre not only caters to shopping needs but also caters to the need to entertain and socialise. It’s just a matter of time and shoppers will be back with a bang. As far as the retail mix is concerned 90 percent of it will remain the same. A few categories like health facilities, testing centres, and home fitness equipment may find more relevance,” explains Dr.
New Norms & Measures
M2K Corporate Park Shopping Plaza Gurgaon, M2K Rohini and M2K Pitampura Delhi, like all other shopping malls, are very committed to providing a safe and secure environment for their customers.
“Safety, security, well-being and comfort of our customers is the first priority. We are committed to providing safe, secure and convenient shopping places. Regular cleaning with recommended disinfectants and maintaining hygiene in the property is very important and we are fully committed to it. Entry in the mall is allowed only after proper thermal screening and it is mandatory for every individual, be it employee, retailers, staff or consumers. The social distancing norm is followed everywhere as only a limited number of shoppers are allowed in the store. The visitor must have Aarogya Setu app in their mobiles. Kids aged up to 10 years and senior citizens are advised not to visit the mall. Elevators will only be available for expectant mothers, the injured or the differently-abled people. On escalators, people would be allowed on alternate steps. Use of masks, gloves and sanitizers are expected to be the new normal. At M2K we believe that it is important to take all the required measures to ensure the safety of its customers, employees and those working with partner retailers,” says Dr. Rawat.
Role of the Government
The retail sector is still waiting for a relief package from the
Government, but different states and banks under RBI guidelines have provided some assistance to the shopping malls on the loans, EMIs and waiving.
“Today, liquidity is a major issue. If the Government releases the tax refund along with the funds it recently announced under other initiatives, it will bring liquidity into the system and help the real estate to recover. Lowering of income tax by the government will put more disposable money in the hands of the customer thus increasing his purchasing power. The abolition of stamp duty or its incorporation under GST will also aid the sector towards this end,” explains Dr. Rawat.
The Road Ahead
Emphasizing on the individual and community awareness and alertness to overcome this situation, Vishesh Rawat concludes, “We as humans are quite resilient and flexible and tend to change according to emerging situations. I am confident of sailing through this pandemic or any other similar situation in future. Individual and community awareness and alertness are the key factors in overcoming this. As an organisation, we are lean, flexible and adapt quickly to the changing situation. Cash conservation, operational efficiency and focus on revenue-generating streams are the key areas to focus. Safety, security and training of all teams are also very important in the new situation.”