As per a report created by real estate consultancy Knight Frank, Think India Think Retail 2024, the trend of “ghost shopping centres,” elaborated as those with over 40 per cent of free retail space, saw a momentous 59 per cent increase to 13.3 million square feet (msf) in 2023 in comparison to the previous year. The study, which checked over 340 shopping centres and 58 high streets in 29 Indian cities, shared a rise from 57 to 64 ghost shopping centres between 2022 and 2023, culminating in a value loss of Rs 6,700 crore.
The report shares that the considerable amount of roughly US $ 798 million (Rs 6,700 crore) trapped in these under-performing shopping centres showcases a chance for institutional investors to merge retail asset portfolios. It also promotes proactive measures by mall developers to repurpose or destroy these structures, thus opening up new avenues for land monetisation.
In Tier-1 cities, the National Capital Region (NCR) had the biggest inventory of ghost shopping centres at 5.3 msf, indicating a 58 per cent increase from 2022’s 3.4 msf. Mumbai came up with 2.1 msf, while Bengaluru ranked 3rd with 2 msf of ghost shopping centres. Hyderabad saw a 19 per cent decline to 0.9 msf in 2023, making it the only Tier-1 city to see a drop. Kolkata saw the most momentous rise, recording a 237 per cent increase to 1.1 msf, even though from a low base of 0.3 msf in 2022.
In spite of the surge in ghost shopping centres, the general vacancy rate in major Indian cities enhanced to 15.7 per cent in 2023 from 16.6 per cent in 2022, signifying growing demand in the retail segment. Without ghost shopping centres, the vacancy rate in the segment bettered to 7.4 per cent.
The report emphasizes that excluding such assets is wise due to many constraints, including poor location, archaic design, strata-sold arrangements, and the disrepair and lack of appeal of the structures.
Besides, shopping centres in 29 Indian cities have the ability to create US $ 14 billion in revenue in the Financial Year 2024-25.
