Covid 19 Impact on Malls & Real Estate

Covid19: Post facto and Ex-ante Era for Mall & Real Estate Industry

Covid19 has indeed put to rest lot of businesses which were on a dynamic track. If we consider every project at ground zero, it would mean that barring the capital reserves and cash reserves, the IRR would be less than minimum required rate of return. In which case should we calculate the IRR lesser than the cost of capital then the chances are high that the Industry will not have desire-able business propositions. In either case, post the 2019 Covid pandemic, the retail brands, the purchasers of real estate will re-calculate or re-purpose their entire business model. The challenges with Malls specifically, will be the Retail Brands bidding for lesser rentals, reduced CAM Charges and reduced utility charges despite the fact that the cost of Mall operations will continue to remain the same. Obviously the Multiplexes will have to observe the social distancing, thus reducing their Revenues or increasing the ticket prices, which in either case is detriment to the business. Gaming Zones, Theme Parks, Food Courts, MBO’s will also not be able to attract festive crowds for a long time to come now. Hence, the social distancing will automatically reduce the foot prints. So does the EBO model work or the MBO model or a mix of Omni-Channel or purely Revenue Share with the Mall Owner or Sell Out of space…will reduce the Market value by over 40%, which could necessarily be considered as blocked capital!! Newer projects that are yet to start within 3-4 years will still have the ray of hope alive but have to re-invent the Project & Infrastructural layout alongwith Legal roadmap to ensure that they are up with the needs of the Future. We have tried to identify some of the problems, though not exhaustively presented on this site, but constitutes a complete literature in our Business Revival Structure Plan (BRSP). The BRSP is meant for consumers, intending to hire the services of a well-developed plan of White Lotus Advisory Services Pvt Ltd. Few excerpts are given below for purpose of readers’ understanding.

The main stressors of Covid19 effect are mentioned below that is introspective for any consumer across the Globe, which could be a new narrative and a thought process:-

1. Risk of contagion, threat and safety
2. Information Anxiety (Over-information) and the Fear of Unknown
3. Containment, Quarantine and Confinement
4. Social Exclusion and stigma around any such episodes
5. Social Insecurity, Joblessness
6. Financial Losses and stocking of inventories

White Lotus Advisory Pvt Ltd., has successfully designed manuals across the various aspects that comprise the concept of Luxury Real Estate & Malls. The systemic approach for such a re-branding, and its well-designed Key Operating Procedures are available with White Lotus Advisory Pvt Ltd.

As an Advisory Firm, with high indulgence in Hospitality, Healthcare, Malls and Real Estate; we have been able to achieve a clear agenda for revival of such establishments under the aegis of the knowledge bank with its highly specified Training Modules for such establishments.

Some of the moderators that are in-built in the Key Operating Procedures:-

1. MOST importantly motivational – Programs for Retail Brands, Consumer Forums within the Mall, Webinars and Employees of the Mall & Real Estate Developers
2. Restructuring of the Layout – Project Management
3. Corporate Governance Structure – AGM à Business Execution
4. Pre-preparation for a Modular engagement and hand-hold Business Partners and Customers
5. Infrastructure Offerings, Ambience and Experience
6. Internal Control System – MMI, Efficient Execution, Conformation to regulations, Articles of Incorporation
7. Business Operations – Auditing & Monitoring Structure, Risk Management, Safety & hygiene protocols, Anti-social factors, CSR Initiatives
8. Skilled / Trained personnel, preferably existing personnel with detailed training
9. Close engagement with Institutional Agencies
10. Creating Omni-Channel distribution systems by the Mall Management
11. Optimization of communication on a transparent mode through animated videos well in advance
12. Strictly prohibit spreading of unverified statements amongst all and train personnel effectively. Remove self-stigma first and then integrate to the society
13. Effective use of Social Media Channels and Customers’ speak columns to be actively used; which may identify Return-To-Work model through psychosocial communication strategies
14. STRONG Audit & Compliance Processes through Strategic Partners
15. Facing the challenges: Today and Tomorrow

The turnarounds are available in wholesome, as shown in the structure below or through a customised Business Plan:-

MACRO PLANNING:-

MICRO PLANNING:-

The phase has become extremely challenging, which the existing human race may not have witnessed in their life time. However, we believe that when winds are extremely turbulent, it is a great idea to build a half-wall and a windmill alongside…With this ideology, White Lotus Advisory Services invites Hotel & Resort Investors to send in their clarifications to us per return mail at director@whitelotusadvisory.com and fill up the form by clicking in the link given below. We shall be glad to sail all stakeholders through our acquired learnings and findings.

Keep Calm and Steady!!

Shantanu Lahiri

Managing Director

White Lotus Advisory Services Pvt Ltd