Mall Festival Sales At 80% Of Last Year, Sustaining: Prestige’s Irfan Razack

Vacancies remain below 10% and the shops being left vacant are filled in “very soon”, Razack said.

Pedestrians pass by UB city mall, in Bangalore, India. (Photographer: Namas Bhojani/Bloomberg)
Pedestrians pass by UB city mall, in Bangalore, India. (Photographer: Namas Bhojani/Bloomberg)

Malls managed 80-85% sales this festive season, compared to that seen in Diwali 2019, according to Irfan Razack, at a time when Covid-19 has eaten into a number of businesses that require people to step out.

Shoppers dominated these footfalls as people prepared to celebrate India’s most auspicious month, albeit largely from home, the managing director of the Prestige Group told BloombergQuint’s Menaka Doshi in an interview. “We should be happy at this level and this will continue till at least a year, year-and-a-half till the entire courage comes back.” Other contributors such as cinema sales will take a while to resume normalcy, he said.

The real estate group is present in most segments—from affordable homes to luxury properties, malls and office spaces. Largely present in south India, Prestige Group has eight malls, including seven ‘Forum’ properties and UB City in Bengaluru. Many of these are in the process of being sold to Blackstone as part of a broader commercial realty deal.

Vacancies remain below 10% and the shops left vacant would be filled “very soon”, Razack said. The company has cut rents temporarily to some of its smaller retailers to help them survive the pandemic. It’s relatively less worried about larger brands which have “deeper pockets”.

Other Highlights:

  • Employees of most tech parks continue to work from home. However, they will have to return to work at some point.
  • Haven’t received a large number of termination notices in the office space segment. Vacancies at 5-7%.
  • Commercial rent has reduced everywhere but a substantial decrease is only visible in cities like Mumbai where it was very high to begin with.
  • “Very, very confident office market will bounce back as a lot more business comes to India.”
  • Hospitality segment has started crawling back but will only improve in another year once international travel picks up.
  • On residential real estate, demand has risen because of lower interest rates and incentives on stamp duties.
  • A substantial uptick in home purchases by non-resident Indians.

Watch the full conversation here: