One in Five Shopping Centres Vacant Over 40% Across 32 Cities: Knight Frank

There are 74 ghost shopping centres — those with a vacancy rate exceeding 40% — out of 365 such retail properties across the top 32 cities, according to Knight Frank. These centres are often marked by high vacancies, weak tenant curation, ageing infrastructure, and declining relevance.

Real estate consultant Knight Frank India recently released a comprehensive report titled 'Think India Think Retail - Value Capture: Unlocking Potential'. This report maps the country's retail real estate landscape across 32 cities, providing valuable insights into the current state and future potential of the retail sector.

A significant finding of the report is that nearly one-fifth of India's operational shopping centres fall into the category of 'Ghost Malls'. These are assets characterized by high vacancies, poor tenant management, and outdated infrastructure. Across the 365 shopping centres surveyed, 74 have been classified as ghost assets, representing a total area of 15.5 million square feet (mn sq ft).

Within this pool, the consultant identified 15 centres with a combined area of 4.8 million sq ft that could be retrofitted and potentially earn Rs 357 crore as annual rental income. The report defines ghost shopping centres as those that have been operational for more than three years with a vacancy rate exceeding 40% of their total leasable space.

Shishir Baijal, Chairman and Managing Director of Knight Frank India, highlighted the positive trends in the retail sector. '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,' he said. With Grade A malls operating at only 5.7% vacancy and several Tier 2 cities demonstrating strong absorption trends, the sector is well positioned for future expansion.

As consumer demand evolves and brands scale their footprint, revitalizing older centres through redevelopment or adaptive reuse will play a pivotal role in shaping the next chapter of India's retail transformation, according to Baijal. The report suggests that strategic investments in upgrading infrastructure, enhancing tenant mix, and leveraging technology can significantly boost the appeal and profitability of these underutilized assets.

The findings of the report underscore the need for proactive measures to address the challenges faced by the retail sector, particularly in Tier 2 and Tier 3 cities. By focusing on innovation and sustainable practices, stakeholders can unlock the full potential of the retail market and drive economic growth in the region.