According to a recent assessment by property consultant Knight Frank, a large number of ‘ghost malls’, or buildings with a vacancy of more than 40%, have appeared in India’s organized retail sector, causing a loss of more than $524 million. According to the report, 57 malls, or up to 21% of those in India’s top eight cities, are currently in ‘different stages of dilapidation,’ with causes ranging from improper due diligence to poor layout.
Knight Frank stated on Tuesday that it was ‘imperative’ to repurpose the buildings since a huge amount of cash was locked in them. ‘All attempts to breathe life into these assets and attract a healthy retailer mix and footfalls have been fruitless,’ the company added. NCR (40%) is first among the top three markets in terms of the amount of unoccupied space, followed by Bengaluru (16%) and Hyderabad (14%).
The property consultant stated that the 8.4 million square foot area of ghost malls ‘presents a good opportunity to unleash alternate usage and boost mall health’. The top eight markets’ total mall health, excluding the ghost malls, has improved since the epidemic began, with their numbers increasing to 271 from 255 in 2019. Knight Frank said that Grade A malls ‘continue to operate strongly, topping pre-pandemic consumption, footfalls, and occupancy levels’.
According to Vivek Rathi, Director of Research at Knight Frank India, the amount of new retail space that will be added to malls over the next six years will be between 50 and 55 million square feet. He also predicted that the volume of organized retail sales in the top eight cities will increase at a CAGR of 17%, from $52 billion in FY 2022 to $136 billion by FY 2028.
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