JOIN USIndia has a 'ghost mall' problem, Knight Frank data show
A lot of “ghost malls”, or properties with a vacancy of more than 40 per cent, have sprung up in the organised retail sector in India, resulting in a loss of over $524 million, according to a new report by property consultancy Knight Frank.
As many as 21 per cent or 57 malls across the top eight cities in India are currently in “different stages of dilapidation”, the report said, citing reasons ranging from lack of due diligence to faulty layout.
“All attempts to breathe life into these assets and attract a good retailer mix and footfalls have been unsuccessful,” Knight Frank said on Tuesday, adding that it was “imperative” to repurpose them as an enormous amount of capital was trapped in such assets.
The top three markets comprising the vacant space include NCR (40 per cent), followed by Bengaluru (16 per cent) and Hyderabad (14 per cent).
“Ghost malls covering an area of 8.4 million square feet present a prime opportunity to unlock alternate usage and improve mall health,” the property consultant said.
Excluding the ghost malls, the overall mall health has improved in the top eight markets from when the pandemic started, with their numbers rising to 271 from 255 in 2019.
“Grade A malls continue to perform well, beating pre-pandemic consumption, footfalls, and occupancy levels,” Knight Frank said.
Vivek Rathi, Director of Research of Knight Frank India, expected the fresh supply of retail space in malls to be at 50-55 million square feet over the next six years, and organised retail sales volume in the top eight cities to rise at a CAGR of 17 per cent to $136 billion by FY 2028 from $52 billion in FY 2022.