Ghost malls have a vacancy rate of over 50 per cent.
Nearly one-fifth of 365 shopping centres in 32 cities across India have slipped into derelict status or become ghost malls, according to a report by realty consultancy firm Knight Frank.
The report stated that these malls have the potential to unlock over ₹350 crore in rentals. Ghost malls have a vacancy rate of over 50 per cent.
The report stated that across 365 shopping centres surveyed by the real estate consultancy, translating 134 million square feet (msf) of overall stock, 74 have been classified as ghost assets representing 15.5 msf of dormant retail potential.
Apart from high vacancy rates, several assets are witnessing weak tenant curation, ageing infrastructure and declining relevance.
'Within this pool, 15 centres with a combined area of 4.8 mn sq ft have been identified as high-potential assets that could deliver as much as ₹357 crore in annual rental revenues if reinvigorated effectively,' the report said.
The trend is not limited to smaller cities or emerging markets, with Tier-I cities, accounting for 11.9 msf or around 75 per cent of the dormant stock, creating the potential for redevelopment and acquisitions by mall developers wanting to gain scale.
'Of the shortlisted assets with clear reinvigoration potential, Tier-I cities hold an opportunity of ₹236 crore in annual rentals, while Tier-II cities add another ₹121 crore to the reinvigoration landscape,' the report added.
The trend indicates that even some of the country's earliest and most established malls have struggled to keep pace with changing consumer expectations, shifting brand strategies and the evolution of modern, experience-led retail formats.
Calling this a substantial opportunity for developers and investors, Shishir Baijal, chairman and managing director at Knight Frank India said that India's retail sector is entering a defining phase of growth, supported by strong consumption and a clear shift toward high-quality organised retail formats.
'With Grade A malls operating at only 5.7 per cent vacancy and several Tier-II cities demonstrating strong absorption trends, the sector is exceptionally well placed for future expansion,' Baijal added.
Despite the ghost mall challenge, the report said that some Tier-II cities are outperforming metros on fundamentals.
Mysuru, Vijayawada, Vadodara at 2 per cent, 4 per cent and 5 per cent vacancy rates, respectively, emerge as the strongest shopping centre markets, each operating with near-full occupancy and healthy tenant mixes.
On the other hand, cities like Nagpur (49 per cent vacancy), Amritsar (41 per cent) and Jalandhar (34 per cent) illustrate the consequences of oversupply, poor planning and weak anchor presence.
The overall retail vacancy across the 32 cities stands at 15.4 per cent. The report stressed that the real issue is the scarcity of high-quality retail space, especially in Tier-II markets where demand is rising faster than supply.
Feature Presentation: Rajesh Alva/Rediff
