India: Ghost shopping malls surged 59% in 2023, 16 retail centres shut across top cities

New Delhi [India], May 7 : In 2023, there has been a sharp rise in low-performing shopping malls with approximately 13.3 million square feet of retail space categorised as 'ghost shopping centre', a 59 per cent year-on-year surge.
According to Knight Frank India's latest report, 'Think India Think Retail 2024: Shopping Centre and High Street Dynamics Across 29 Cities', there has been an increase of 238 per cent year-on-year in Ghost Shopping Centre in terms of leasable area since 2022 in the prime markets.
As a result of the rise in 'ghost shopping centres', Knight Frank India estimated that loss of value to be at Rs 67 billion or USD 798 million, in 2023.
As per definition, ghost malls are shopping centres, typically having a high vacancy rate and low consumer footfalls.
According to the report by the global property consultant, National Capital Region (NCR) accounted for the highest ghost shopping centre stock, measuring at 5.3 million sq ft (rise of 58 per cent year-on-year), followed by Mumbai with 2.1 million sq ft (rise of 86 per cent year-on-year) and Bengaluru with 2.0 million sq ft (rise of 46 per cent year-on-year).
Hyderabad is the only city to record a decline in the ghost shopping centre stock by 19 per cent year-on-year to 0.9 million sq ft in 2023. The sharpest rise in ghost shopping centres was recorded in Kolkata (237 per cent year-on-year), though on a lower base.
In tier 1 cities, the total number of shopping centres have reduced in a period of one year.
Despite the addition of eight new retail centres, total number of shopping centres reduced to 263 in 2023 as 16 shopping centres were shut down over the last year.
Underperforming shopping centres were either demolished due to reasons such as developers undertaking residential or commercial developments or were permanently closed or auctioned.
The report delved into the retail real estate markets beyond the top-tier markets. This study covered 340 shopping centres and 58 high streets across 29 Indian cities, conducted through primary surveys.
According to Knight Frank Research, as of 2023, India has a total shopping centre stock of 125.1 million sq ft. The top 8 Indian cities constitute 75 per cent of the total gross leasable area, at 94.3 million sq ft across 263 shopping centres while Tier 2 cities constitute 30.8 million sq ft.
Of the top 8 cities, NCR (31.3 mn sq ft), Mumbai (16.3 mn sq ft) and Bengaluru (15.6 mn sq ft) were the top three cities in the pecking order of leasable area available in the shopping centres.
In the report, Knight Frank has projected potential revenue of the shopping centres across 29 cities to reach USD 14 billion during 2024-25. The revenue projections for shopping centres is based on an extensive primary survey of 340 shopping centres, including the top 8 cities.