India’s retail landscape is witnessing a transformative shift, marked by the rise of ‘ghost shopping malls’—a term characterising underperforming retail spaces plagued by low footfall and soaring vacancy rates. Recent research from Knight Frank India has highlighted that approximately 13.3 million square feet of retail space across major cities now qualifies as ghost shopping malls. This trend poses a significant challenge for the retail sector, reflecting the complexities of modern consumer behaviour and the evolving market landscape.
Despite the proliferation of Grade A malls that continue to attract consumers, the phenomenon of ghost malls has surged dramatically, with a staggering 59% year-on-year increase in low-performing shopping centres. These establishments often struggle with vacancy rates exceeding 40%, a stark contrast to their more successful counterparts. Factors contributing to this decline include the rise of online shopping, uninspiring mall designs, ineffective management, and fierce competition from well-established malls. As consumer preferences shift towards convenience and online platforms, traditional retail spaces find themselves grappling with existential challenges.
In light of these issues, mall owners are increasingly seeking innovative ways to monetise their underperforming assets. The Knight Frank survey indicates a trend towards repurposing ghost malls for alternative uses such as residential projects, co-working spaces, and even permanent closures or auctions. Notably, Delhi-NCR has emerged as the focal point for ghost malls, exhibiting the highest concentration of abandoned shopping centres, closely followed by Bengaluru, Mumbai, and Kolkata. However, cities like Hyderabad have reported a decline in such abandoned properties, showcasing a potential turnaround.