One in Five Shopping Centres Vacant Over 40% Across 32 Cities: Knight Frank
Real estate consultant Knight Frank India has released a comprehensive report titled 'Think India Think Retail - Value Capture: Unlocking Potential', which maps the country's retail real estate across 32 cities. The report highlights a significant trend: nearly one-fifth of India's operational shopping centres are classified as 'Ghost Malls'. These properties are marked by high vacancies, weak tenant curation, ageing infrastructure, and declining relevance.
According to the report, out of 365 shopping centres surveyed, 74 have been classified as ghost assets, representing 15.5 million square feet (mn sq ft) of area. These ghost shopping centres are defined as those that have been in operation for more than three years with a vacancy rate exceeding 40% of their total leasable space.
Within this pool of ghost shopping centres, 15 centres with a combined area of 4.8 million sq ft have the potential to be retrofitted and earn Rs 357 crore as annual rental. This highlights the significant economic potential that can be unlocked through the revitalisation of these underutilised assets.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, stated, '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.' Despite the challenges posed by ghost malls, the sector is showing promising signs of recovery and expansion. Grade A malls are currently operating at only 5.7% vacancy, and several Tier 2 cities are demonstrating strong absorption trends.
As consumer demand evolves and brands scale their footprint, revitalising older centres through redevelopment or adaptive reuse will play a pivotal role in shaping the next chapter of India's retail transformation. This strategy not only helps in maximising the economic potential of existing assets but also contributes to the overall growth and modernisation of the retail sector.
The report underscores the importance of strategic planning and investment in the retail sector to address the challenges posed by high vacancy rates and to tap into the vast potential for growth. By focusing on high-quality organised retail formats and innovative redevelopment strategies, India's retail landscape is poised for a transformative shift that could benefit both consumers and businesses alike.
