What does the future hold for shopping malls, eating districts and cinema halls? DLF’s Sriram Khattar explains

Do not look at the future of our businesses from the spectrum of the current situation, says MD, Rental Business.

From June 8, shopping malls are supposed to reopen in every state. We saw an absolute mess when it came to the aviation sector and it took a while to get all states on board. Tell us when it comes to shopping, what is the situation?
It is a typical centre versus states situation. The centre gives the guidelines and then leaves it to the states to decide. So each state has to decide what they want to do and when they want to do it and how they want to do it. I have just heard about 15 minutes back that the Delhi Disaster Management Authority has said that the shopping malls may not open on 8 June. I still have to read the circular and understand it a little more. Honestly I am excited that we will start business now. Let me see what the circular says and then we will sort of regear ourselves accordingly.

Right now you do not know which all states are going to reopen the shopping malls. What about food courts in offices? You are a large provider for commercial real estate as well. All of them have dining; so is that different? I am asking on behalf of all the employees and employers out there?
Yes, we realise that if the employees come to work and they do not have food to eat, it is going to be a difficult thing for them. But the government is treating the food courts on the same platform as they are treating restaurants. So it will take a while before there is clarity on this. From our side, for example, in Cyber City, we have got convenience stores-like model stores. We have opened all the kiosks which were serving soft drinks and chips so that people have their basic needs met. And we are trying to see if we can put two-three standalone shops there, which just sells basic food items for the people who come and work in Cyber City.

You are looking very calm for a guy who should be worried that corporate India is getting used to working from home and the public is getting used to shopping online. WIll this disrupt your bread and butter?
Initially when this lockdown started, we did have a few sleepless nights. But we did a lot of research and I will take two minutes to give you my take on the work from home. I think work from home is here to stay. But believe me, when I passed my chartered accountancy and I was a consultant in a leading consulting firm, we had a room of four desks, which was occupied by eight consultants. So this desk sharing and working from home or working from client’s offices has been there for decades and it will have some level of impact but this impact will be offset by three-four things.

One, a lot of broadband will not be available at homes. Two, there are a lot of third-party IT providers and our tenants are mainly IT providers who do not allow their data to go offsite; so they have to be at a central location to do so. Third, to be able to do analytics using this big data and large broadbands may not be possible from home. Fourth, when you have de-densification because of the social distancing, the area that will be required will be a little more. So I think the jury is still out but I believe it will have an impact. But the impact will be minor. It will not be very high. I may also add that some of my American friends tell me that whenever they tried this experiment in their companies on work from home, the productivity over a period of time tends to drop and therefore it rather would have people working together.

TCS for example which is India’s largest IT company and they have said 80% of its workforce is going to do work from home.
TCS had said so but there are two American CEOs, Apple and one more, who have said that work from home is not something that is going to work for long. I also do not understand that a guy who comes in, say, from Muzaffarnagar, who is a young IT engineer, comes here to create an identity for himself. He stays with two-three friends in a dorm and then you tell him you sit in the dorm and work. It is not his identity. He won’t be able to do what he came here for. So I think there will be a little bit of back pressure on this.

So are your plans on track? Are you not worried?
There will be some slowdown. As the Managing Director of the business, I am a little concerned but not overly concerned. There will be a little slow down but that is part of the game. We have seen a slowdown in 2008-2009. In retail, we saw a little slow down when demonetisation took place. We saw a slowdown when the GST was introduced. I think we are quite prepared and we will come out much stronger once these things are over. In this period, I may share with you that we worked a lot in terms of reducing our own costs and whatever reduction in costs we have had, we have passed it on to all our tenants by way of lower maintenance costs and all this has been appreciated. So I think we will do well as we go ahead.

What is the future of retail? You used to have HR departments, you will still have CEOs and top management making sure the social distancing is maintained. How are you going to manage crowds in a shopping mall provided that you do seek crowds at all?
Crowds will come back. What you are asking is a question of what happens in the interim in the next four, five months. I think we have put in very strong protocols. Whatever government protocols have been there, we have exceeded those and put them. For example, we will not allow more than one person per 75 sq ft of the mall. We are upgrading our lookout app so that you can do a time slot booking if you want to come to our mall. Whilst the crowds will be less, our companies will do social distancing, sanitisation and fumigation in the most safe way and I can assure you it will leave you much better than what is happening on the high streets today.

You are a listed player and you are a responsible company. You have followed the lease rental discounting and there are hedge funds involved, and there are third party rights that have been created but it is not the fault of your tenants or your retailers. That is what they are going to tell you.
It is not anyone’s fault if you ask me. It happens but when we are in it together and the retailers realise we will have to find a joint solution, being the big brother, I am confident that we will play that role.

What is going to happen to your shopping districts or eating districts like Cyber Hub, Horizon-1, etc? How are you going to crowd control over there?
It will be a new normal. There is no question about that. I heard the Restaurant Association of India President Anurag talk on a show where he said that they are going to reduce the number of tables by one-third and they are going to put cross marks on places where people cannot sit. Each one will have to look at managing the crowds that come and at the same time, they will have to keep looking at their cost structures to see they are profitable despite low revenues. That can only happen if they have lower costs.

Look at airlines for example. They have started and if an airline starts then they learn from their things. I read today somewhere that the airport regulatory authority or aviation regulatory authority is saying that they will try and tell the airlines to keep the middle row empty for some time. So I think these sorts of precautions will happen but they would be temporary till the scare and till the virus goes away.

What is the future of the movie exhibition business and cinema hall because a lot of the crowds also go to malls because of multiplexes. If that is not going to be in business, people are not going to be wanting to go there and there are a lot of footfalls you are going to lose?
I would strongly urge you to not look at the future from the spectrum of the current situation. I think this also will play itself out. If you see the Far East, when the SARS came and when one or two other similar flues came, there was a disruption for a few months and then things got back to normal.If you see China, it is getting back to normal. Some of the European countries are getting back to normal. I think it is a question of when the virus plays itself out and when things start coming back to normal. Meanwhile, we have to tighten our belts and reduce our costs and live within the means.