With consumers back in the shops and retailers doing fairly good business, mall owners are now signing leases at higher rentals. In fact, space in malls seems to be in short supply as retailers are looking for bigger showrooms. Occupancy levels are looking up with most malls reporting levels of 96-98%. While footfalls are yet to hit pre-pandemic levels, consumption is above the 2019 levels.

DLF, for instance, has been able to sign new leases at rentals that are 20-25% higher than they were last year. Pushpa Bector, executive director, DLF Retail, told FE the business outlook was promising. “We are expecting to increase rents by another 10% from October onwards as the festive season starts,” Bector said.

Shishir Shrivastava, managing director, Phoenix Mills, said he was looking at an increase in rentals of 11-12% in the current year over FY22, over the minimum guaranteed rent. “Over and above this, we would also see a higher percentage of revenue share from the same brand category,” Shrivastava said.

Collections at Phoenix Mills in April were a strong Rs 170 crore. Shrivastava told analysts that at `251 crore, retail rental incomes had risen 15% y-o-y in the March quarter and back to pre-Covid levels.

Mall operators observed that footfalls are yet to reach pre-pandemic levels. However, consumption, they said, has picked up significantly since March and is above the 2019 levels.

Rajneesh Mahajan, CEO, Inorbit Malls India, said the per person spend has gone up as buyers are upgrading purchases. Mahajan attributes this to more disposable income in the hands of customers who have saved on travel expenses during the pandemic. “Even with fewer footfalls, we are getting better sales as people are spending more on premium and branded products,” he said.

However, mall owners are confident footfalls will go up in the coming months as consumers are less fearful of infection and the festive season sets in. “Demand for retail space is good and we have a waiting list for our properties. All categories are looking at larger experiential stores now, be it athleisure, luxury, food and beverage, international brands or even electronics,” Bector said. With the onset of the wedding season from October, she is hopeful that even Indian designers and ethnic wear shops, which have been struggling, will do well.

Absorption across Grade A malls and high streets stood at 0.5 million sq ft in January-March in the country’s top six cities, up by nearly 40% y-o-y, according to CBRE. Also, supply of 0.6 million sq ft of investment-grade mall came in during the March quarter, a four-fold jump year-on year.