“ICRA expects the outlook of commercial real estate, both of the office segment and the retail malls segment to be stable for FY2023. The revision in the outlook for retail malls from negative to stable factors in the improvement in the rental incomes backed by contractual escalations in rentals and strong rebound in trading density,” it said in a statement.
The demand drivers for retail malls stem from the relaxation in permitted occupancies of multiplexes and release of multiple big budget films and improved footfalls and sharp recovery in retail consumption, the rating agency said.
ICRA noted that the outlook for office space continues to be stable. The stable outlook is supported by the resumption of back-to- office plans and robust hiring in the tech sector. The footfalls are expected to reach pre-Covid levels in FY2023, however, the average spend per footfall is likely to witness some moderation when compared to FY2021-FY022,” said Mathew Kurian Eranat, Vice President and Co-Group Head, ICRA.
The rental income of malls in FY2023 is expected to surpass FY2020 levels by around 4-6 per cent.
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