Tally of ghost malls rises to 64 in 2023: Report

Bengaluru: The number of ghost malls in India, (read, shopping centres with over 40 per cent vacancy), increased to 64 in 2023, from 57 in the year ago period, according to a new report released by property consultancy Knight Frank India on Tuesday.

At approximately 13.3 million square feet (msf), this vacant retail space amounts to a loss worth Rs 6,700 crore in construction value, per the consultant’s estimates. The National Capital Region (5.3 msf), followed by Mumbai (2.1 msf) and Bengaluru (2 msf), made the highest contributions to this pie.

“Such a scenario offers institutional investors the chance to explore avenues for repurposing or revitalising their retail portfolios, while developers can seize opportunities to monetise these assets through repurposing or redevelopment efforts,” the report noted.

The study surveyed 340 shopping centres and 58 high streets across 29 cities. Knight Frank estimates the revenue potential of these assets shall reach Rs 1,400 crore during the financial year 2024-25.

Overall, the total shopping centre stock in India stood at 125.1 msf in 2023, with 75 per cent of the gross leasing area (GLA) concentrated in the top-8 cities. Amongst tier II geographies, Lucknow, Kochi and Jaipur featured as key players in terms of GLA available in shopping centres.

“Grade A malls have notably excelled, maintaining robust occupancy, foot traffic and conversion rates…Conversely, Grade C assets and those classified as ghost shopping centres are lagging, prompting landlords to take action to rejuvenate or divest such properties,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.

Of the 340 operational shopping centres in 2023, Grade A stock with a gross leasing area of 58.2 million square feet comprised 82 assets. This stock, with high occupancy, a strong tenant mix, good positioning and an active mall management, contributed 47% of the overall shopping centre space across the country during the year.

Grade C stock, on the other hand, accounted for the smallest share at 22 per cent or 27.2 msf of leasable space.

In terms of shopping centre density, Bengaluru stood out with a notable figure of 1,147 square feet/ 1,000 people. This indicates a well-developed retail landscape catering to a sizable urban population.

Amongst categories, apparel led the chart in shopping centres accounting for 33 per cent of store presence, followed by food and beverages (16 per cent). Entertainment, home and lifestyle, and department stores occupied a 3 per cent share each.