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Big shopping malls decide to waive off rents during lockdown

Big shopping malls decide to waive off rents during lockdown

LAHORE: Almost all the leading malls of the country including Dolmen Mall, Packages Mall, LuckyOne Mall, Centaurus and Mall of Lahore have waived off April rents of shops for retail shopkeepers and some have even given discounts on March and May rents.

According to sources, the two bodies of retailers namely the Pakistan Retail Business Council (PRBC) and the Chain Store Association of Pakistan (CAP) jointly written letters to all the shopping malls and also to their individual landlords in different markets including Link Road Market, M M Alam Road, Liberty and other markets asking them to give rent relief to retail businesses during lockdown period as they would not be able to pay the rent during the lockdown period.

“The malls have to agree to this demand because all the retailers have joined hands,” the informed sources said.

The PRBC comprises Gul Ahmed, Outfitters, Khaadi, Bata, Servis shoes and other large retailers headed by Ziad Bashir, of Gul Ahmed in Karachi while Shahid Hussain of Servis Sales Corporation heads it in Lahore. The CAP, on the other hand represents over 200 retail brands of all sizes including Sapphire, Bareeze, Maria B, Stylo to name a few.

According to sources, the individual retailers are not showing any flexibility but after the rent relief from malls for three months, it would also build up pressure on individual landlords and now retailers are in a better bargaining position to deal with individual landlords as well.

The sources said that the average rent of shopping malls is Rs 400 per square foot. But large retailers with more bargaining powers and large area occupiers are even able to negotiate and get better rates for rents like for instance Khaadi is paying only Rs 200 per square foot to most malls.

So, rents are between Rs 200-600 per square foot and on average it is between Rs 350-400 per square foot which has now been waived off.

The sources added that it does not mean that they (retailers) do not have to pay anything as they would still be paying an average Rs100 per square foot on account of Common Area Maintenance Charges (CAM) even if their retail stores are not open.

But some malls have even given discounts on CAM ranging from 30 percent to 50 percent while some malls have agreed to charge it on ‘as-per-actual ‘ basis; malls will be charging only the actual costs incurred to run because banks, pharmacies, grocery stores are still operating.

In reply to retailers request regarding rent relief for the period of Covid-19 lockdown, the management of LuckyOne Mall informed the retails that considering the long-term business relation with them and in consideration of the current situation, the LuckyOne Mall has considered the request to continue supporting retailers by completely waiving off the licence fee for April, 50 percent for May and 25 percent for June and in total a waiver off 175 percent for seven weeks.

The LuckyOne Mall also decided to waive off charges of Chilled Water (CW) for the lockdown period, Common Area Maintenance Charges (CAM) to be charged on actual during April lockdown and utilities to be charged as per consumption. Whereas, the management of Centaurus Mall in Islamabad also waived off the rent for the period of 30 days from March 23.  However, this amount will be adjusted towards the end of the current year.