Rents in local markets drop by at least 25%; grocers, chemists least affectedUpdated: Aug 13, 2020 23:11 IST
With the exception of pharmacies, grocery stores and general stores, most of the other commercial establishments at city marketplaces are operating at reduced rents due to the economic crisis unleashed by the Covid-19 pandemic, said multiple stakeholders, including shopkeepers, tenants and brokers. Heads of various market associations across Gurugram estimated that the rents have dipped by at least 25% across most of the locations in the city.
Tej Singh, head of the Vyapar Kendra market association in Sushant Lok-1, said that of the 200 odd shops in the market, almost all have resumed their business, with nearly half of them having negotiated lower rents. “Only 20 or 25 shops are still shut. Mainly pharmacies, general stores and even a few path labs remained open during the lockdown. The rent amount for such establishments has not changed much, since they continued to do good business during the lockdown,” Singh said.
However, for businesses that were more affected — bakeries, salons, coaching centres and suchlike — landlords have agreed to reduce rents. Ankit, who runs a cosmetics store at Sushant Lok Vyapar Kendra, said, “I have been here for many years. The landlord and I have a good relationship. During lockdown, I paid only half the rent, now I am paying 70% till October. We are hoping that business will pick up around Diwali.”
Singh clarified that, in most instances, negotiations between stakeholders have been smooth, with landlords recognising that footfall continues to be less than before. “Most of the establishments in the sector markets are old. Most people have been doing business with each other for years, so there is also an obligation to compromise on rent,” he explained. However, Singh added that the market association has, in some cases, intervened directly. “If a shopkeeper or landlord brings a complaint to us, we mediate for fairer terms depending on the person’s need. If someone’s business has not suffered during lockdown, we don’t get involved,” he said.
This also appeared to be the situation in other commercial hubs in the city, such as South City-1 market, Sector 31 market, Huda market in Sector 14, and Palam Vihar Vyapar Kendra. Most shopkeepers, barring grocers and chemists, said that they have actively been seeking lower rents.
Prakash Khatri, who runs who runs a brokerage firm out of South City Arcade in Sector 42, and is a member of the local shopkeeper’s association, said, “Most of the shops here are either chemists or grocery stores, which have done good business even during the lockdown. For eateries, electronic stores and suchlike, rents are definitely at least 20 to 30% lower. Even if business is picking up slowly, people would still prefer to pay a slightly lower rent because they are unsure of the future.” In South City arcade there are least 150 shops on rent which have negotiated lower rent.
Harinder Rana, a shop owner and president of the Palam Vihar Vyapar Kendra market association, gave a nearly identical account. “Business is not happening at the pace as before. No owner wants to lose a tenant, and tenants also want to hold on to their space. In Palam Vihar too, most landlords have lowered rents, or deferred a portion of the rent for a later date,” Rana said, adding that this benefits both parties. “Not many people are looking to rent new commercial spaces right now,” he said.
There are approximately 700 shops in Palam Vihar. About 300 are shut currently. Of the remaining, 200 are with owners and the rest with tenants. The tenanted properties have all reduced rents by at least 25%.
Bablu Gupta, president of the Sadar Bazar market association, however, claimed that the locality has seen a sharper drop in rental rates than other markets, owing to the diversity of businesses it houses across retail and wholesale categories. As per Gupta, a larger number of businesses have been impacted in Sadar, as opposed to sector markets. “In Sadar, there are jewellery stores, handloom stores, furniture makers. Such businesses have suffered more businesses in sector markets, which are slowly bouncing back. Wholesalers are a little worse off than retailers. So a larger number of shopkeepers here are seeking lowered rents,” he said.
Gupta claimed that in case of certain businesses, landlords have agreed to slash rents by as much as 50%. “I have intervened in a few matters where owners have not agreed to lower the price. Market associations are clear that they will only take up cases where a party has been badly affected. Any proprietor who was doing business in April and May is paying mostly the same rent as before,” Gupta said.In Sadar Bazaar, there are at least 500 shops which have renegotiated rent, from over 1,200 in total.