The first to shut down and considered to be the last to open back amid Covid-19 outbreak, the organised retail players have together sent a detailed representation to the Prime Minister's Office, Finance Ministry, RBI, Niti Aayog recently, sharing that close to one crore livelihoods are at stake and a prolonged shut-down could lead to defaults of about Rs 25,000 crore.

The organised retail sector along with allied industries, shopping centres and dependent organisations, with currently at zero-revenues and mounting costs, in their representation, said that the industry has a far-reaching cascading effect and would need special attention from the government.

Not just this, they have asked the government to look into the issue of banks, which have started invoking contractual obligations and are sending notices to companies for EMI-recoveries under the lease rental discounting facility, the shopping centres industry believes it is being hit from all sides.

Industry body -- Shopping Centres Association of India (SCAI) has recently also sent a plea to the Reserve Bank of India (RBI) requesting an extension in moratorium as well as seeking one-time loan restructuring at lower interest rates.

SCAI Chairman, Amitabh Taneja said, “We are responsible for the livelihood of millions of people across the country and if the government does not intervene now, their livelihoods will definitely be at stake. We have sent our detailed representations on March 18 to the PMO, RBI, Finance Ministry and NITI Aayog. Post which another detailed representation was also submitted to the RBI on April 22, seeking for urgent attention and support."

The shopping centre industry has been seeking financial relief for some time now but continues to be disappointed.

“We are all overburdened with high capital outflow, staff costs, upkeep and maintenance of facilities, high fixed electricity demand charges to name a few. The government has not been forthcoming until now to support the industry with concrete measures that can help ease the stress,” said Rahul Saraf, Managing Director of Kolkata-based The Forum Group.

Saraf added, “We have been asking for a longer-term moratorium on loans, at least until March 31, 2021. Plus, a manageable rate of interest at 5-6 percent will help ease the pressure on cash flows. These are small measures but will go a long way in helping the industry.”

The Forum Group, is one of the largest in East India with 1.25 million leasable area, with presence in Kolkata, Bhubaneshwar and Howrah. They are scheduled to open one property in Rourkela soon.

Dalip Sehgal, CEO of Blackstone-owned Nexus Malls too said, “The industry has a Lease rental discounting (LRD) exposure of more than Rs 70,000-crore. More than 550 of the 650-odd shopping centres are single-owner standalone properties which will be the first ones to be hit and set the industry back by at least a decade.”

Lease rental discounting is a financing mechanism under which a term loan is offered against rental receipts derived from lease contracts with corporate tenants. The owner of the property gets debt financing based on the discounted value of the future rentals and the underlying property value.

It is usually offered against income-producing commercial assets such as office properties, retail malls and logistic parks.

Blackstone-owned Nexus Malls is the largest when it comes to the number of centres and second largest in volume with about 5.8 million sqft operational space. They have a presence in 7 cities: North (Amritsar, Chandigarh), East (Bhubaneshwar), West (Navi Mumbai, Pune and Ahmedabad), Central India (Indore).

The shopping centres industry, which is the second largest contributor to India’s GDP employs close to 8 percent of the total employable workforce supporting lakhs of livelihoods.

A large chunk of this workforce comprises of blue collared workers who are staring at the potential of job loss if the industry does not open up soon. Most of the workers employed in functions like security, housekeeping, engineering, services, kitchen, etc. come from far-flung towns across the country to earn their livelihood.

Post the announcement of nationwide lockdown, many took off to their hometowns due to uncertainties. However, there are many who continue to stay in the big cities trying to meet their means. But the high cost of living in cities, along with the uncertainty of when the industry will open up, has left them scared.

Pushpa Bector, Executive Director, DLF Shopping Malls said, ‘We have been taking a humanitarian approach to ensure that no jobs are lost. But there will come a time when revenues will dry up and sustenance will become an issue. This pandemic has created a lot of fear and disrupted the mental well-being of every individual. Each one is anxious about what the future holds. A closed shopping centre has its own story to tell, the visual is horrifying - what once used to be a buzzing industry, suddenly bears a dead, gloomy look. And the first ones to see this are the blue-collared employees who eagerly wait for their livelihoods to come back to normal. People are not sure how this story will unfold in the days, months to come.”

The industry on its part has been making efforts to support the government by drawing up guidelines and developing processes that can be implemented across the industry.

The industry believes that their preparedness will help in the long term and allow them to move swiftly once the government gives their consent for opening up shopping centres across the country.

“Shopping centres are the front line for many industries including retail, garment, footwear, F&B, Cinema and Bollywood to list a few. Without the showroom, the entire chain fails. Moreover, they are the safest way to begin commerce. Safer than bazaars, kirana stores stand-alone stores because the government can enforce all rules of hygiene, social distancing, safety across 1 million sqft with a single order and hold someone accountable to adhere to the same. Also, shopping centres have their own parking and do not pose strains on local infra/transport," said Atul Ruia, Chairman, Phoenix Mills said.

Phoenix Mills is the largest group with 6 million sqft operational space (8 centres) and 5.8 million sqft under construction and planning, with presence in 6 cities: North (Lucknow & Bareilly), West (Mumbai, Pune) and South (Bangalore, Chennai). Soon has planed to enter Ahmedabad and Indore.

“Further, retailers are most large scale, national, organised players who have their own set of SOPs and best practises. We have taken cues from international best practices as well as recent examples of Singapore, Dubai and have developed our own set of safety protocols. Social distancing and ensuring a hygienic, limited and off-peak hours, safe environment are at the root of it. We are sure that the government does/will recognise these facts and reopen shopping centres in Phase 1 as a priority sector as Dubai has done," Ruia added.

The industry continues to wait for the government to act.