New Delhi: Nearly one-fifth of India’s operational shopping centres fall into the category of 'ghost malls' and reinvigorating just 15 such centres with 4.8 million square feet space can unlock Rs 357 crore in annual rentals, a report said on Tuesday. These 'ghost malls' are assets marked by high vacancies, weak tenant curation, ageing infrastructure and declining relevance. Across 365 shopping centres, 74 have been classified as ghost assets, representing 15.5 mn sq ft of dormant retail potential.
"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 Rs 357 crore in annual rental revenues if reinvigorated effectively," Knight Frank India said in its recent report surveying retail real estate across 32 cities in the nation. According to the report, of the 15 shortlisted assets with clear reinvigoration potential, tier 1 cities hold an opportunity of Rs 236 crore in annual rentals, while tier 2 cities add another Rs 121 crore to the reinvigoration landscape.
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, said Shishir Baijal, Chairman and Managing Director, Knight Frank India. "Our analysis shows that reinvigorating 4.8 mn sq ft of dormant mall stock could unlock Rs 357 crore in annual rentals, which is a substantial opportunity for developers and investors.
With Grade A malls operating at only 5.7 per cent vacancy and several tier 2 cities demonstrating strong absorption trends, the sector is exceptionally well placed for future expansion," he added. The study revealed that the ghost mall challenge is not confined to smaller cities or emerging markets. Tier 1 cities account for 11.9 mn sq ft of this dormant stock, Tier 2 cities contribute the remaining 3.6 mn sq ft.
However, Tier 1 cities are beginning to see a decline in ghost shopping centres as redevelopment, new ownership models, design upgrades, and alternate-use conversions bring ageing assets back to life. "With rising flexible workspace demand and evolving retail formats, dormant centres are finding renewed relevance. While Grade A malls continue to outperform and lower-grade assets struggle, tightening quality supply is shifting attention to these revitalise-able centres," the report highlighted.
Tier 1 cities account for 73 per cent of India’s shopping centre stock, but several tier 2 cities such as Mysuru, Vijayawada, Vadodara, Thiruvananthapuram, and Visakhapatnam have performed remarkably with near-full occupancy and balanced tenant mixes, highlighting a growing appetite for organised retail beyond metros.
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