According to Knight Frank, the count of deserted shopping malls, those with more than 40% vacancy, escalated to 64 last year from 57 in 2022 across eight prominent cities. The real estate consultancy Knight Frank India unveiled a report titled 'Think India Think Retail 2024', delving into the dynamics of shopping centers and main streets in 29 cities.
The report highlighted a significant surge in underperforming retail properties across eight major Tier I cities. A total of 64 shopping malls, encompassing about 13.3 million square feet of leasable space, were designated as 'Ghost Shopping Centers' in 2023. This marks a 58% increase in area compared to the previous year's 8.4 million square feet, resulting in an estimated devaluation of Rs 6,700 crore or USD 798 million in 2023.
The National Capital Region (NCR) accounted for the highest stock of ghost shopping centres, measuring 5.3 million square feet, followed by Mumbai with 2.1 million square feet and Bengaluru with 2 million square feet. Hyderabad was the sole city to experience a decrease in ghost shopping centre stock, down by 19% to 0.9 million square feet in 2023. Kolkata recorded the most significant rise in ghost shopping centres at 237% year-on-year, although from a smaller base. Of the total 64 ghost malls across the top 8 cities, Knight Frank data revealed that Delhi-NCR housed 21, Bengaluru 12, Mumbai 10, Kolkata 6, Hyderabad 5, Ahmedabad 4, and Chennai and Pune 3 each. Shishir Baijal, Chairman & Managing Director of Knight Frank India, emphasized the importance of an enriched retail experience for shoppers, underscoring the significance of physical retail spaces.
Baijal highlighted the exceptional performance of Grade A malls, maintaining strong occupancy, foot traffic, and conversion rates, while Grade C assets and ghost shopping centres lagged, urging landlords to revitalise or divest such properties.
Additionally, Knight Frank noted a reduction in the total number of shopping centres in Tier I cities over the past year, despite the addition of 8 new retail centres. The total count dropped to 263 in 2023 as 16 shopping centres shut down, either demolished due to various factors or permanently closed or auctioned. The report encompassed 340 shopping centres and 58 high streets across 29 Indian cities, compiled through primary surveys examining retail locations to provide comprehensive store-level information.