Ghost Shopping Malls Surge Across 8 Major Cities, Reaching 64 in 2023

The number of ghost malls (vacancy >40%) in eight major Indian cities rose from 57 in 2022 to 64 in 2023. These ghost malls have a combined area of 13.3 million square feet, resulting in an estimated value loss of Rs 6,700 crore. The highest ghost mall stock is in Delhi-NCR (5.3 million sq ft), followed by Mumbai (2.1 million sq ft) and Bengaluru (2 million sq ft). Despite the addition of new retail centers, the total number in Tier I cities declined to 263 as 16 underperforming centers were shut down. The rise in ghost malls highlights the preference for premium properties and the challenges faced by Grade C assets.

The number of ghost shopping malls – those with vacancy of more than 40 per cent -- increased to 64 last year from 57 in 2022 across eight major cities as retailers and consumers are preferring premium properties, according to Knight Frank.

Real estate consultant Knight Frank India on Tuesday released a report titled 'Think India Think Retail 2024' capturing the dynamics of shopping centres and high streets across 29 cities.

The consultant found a sharp rise in low-performing retail assets across eight major Tier I cities.

As many as 64 shopping malls with about 13.3 million square feet of gross leasable area have been categorised as 'Ghost Shopping Centre' in 2023.

In terms of area, this is up 58 per cent from 8.4 million square feet in the preceding year.

As a result of the rise in ghost shopping centres, Knight Frank estimated the loss of value to be at Rs 6,700 crore or USD 798 million in 2023.

National Capital Region (NCR) accounted for the highest ghost shopping centre stock measuring at 5.3 million sq ft (rise of 58 per cent Year-on-Year), followed by Mumbai with 2.1 million sq ft (rise of 86 per cent YoY) and Bengaluru with 2 million sq ft (rise of 46 per cent YoY).

Hyderabad is the only city to record a decline in the ghost shopping centre stock by 19 per cent YoY to 0.9 million sq ft in 2023.

The sharpest rise in ghost shopping centres was recorded in Kolkata (237 per cent YoY), albeit at a lower base.

Of the total 64 ghost malls across top 8 cities, Knight Frank data showed that 21 such malls are in Delhi-NCR, 12 in Bengaluru, 10 in Mumbai, 6 in Kolkata, 5 in Hyderabad, 4 in Ahmedabad and 3 each in Chennai and Pune.

''The momentum of consumption, propelled by rising disposable incomes, a youthful demographic, and urbanisation, tilts in favour of the organised retail sector,'' Shishir Baijal, Chairman & Managing Director of Knight Frank India, said.

An enhanced retail experience remains crucial for shoppers, highlighting the significance of physical retail spaces, he added.

''Grade A malls have notably excelled, maintaining robust occupancy, foot traffic, and conversion rates, thereby delivering value to their customers.

''Conversely, Grade C assets and those classified as Ghost Shopping Centres are lagging, prompting landlords to take action to rejuvenate or divest such properties,'' Baijal said.

Knight Frank also pointed out that the total number of shopping centres in Tier I cities have reduced in a period of one year.

Despite new addition of 8 new retail centres, the total number of shopping centres reduced to 263 in 2023 as 16 shopping centres were shut down over the last year.

Underperforming shopping centres were either demolished due to various reasons such as developers undertaking residential or commercial developments, or were permanently closed or auctioned.

The report covers 340 shopping centres and 58 high streets across 29 Indian cities, conducted through primary surveys.

The survey examined retail locations in the selected markets to compile a comprehensive compendium of store-level information, the consultant said.

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