The Aryavarth Express
Agency (New Delhi): According to a new consultancy report released by Knight Frank India, small shopping malls across India are increasingly being abandoned, as consumer preferences shift towards online shopping and larger retail centers. These smaller malls, struggling with high vacancy rates exceeding 40%, are being labeled as “ghost malls.”
The report, titled “Think India Think Retail 2024,” points out that while the Gross Leasable Area (GLA) for all shopping centers in major Indian markets surged by 238% in 2023, the number of ghost malls also rose, climbing to 64 in 2023 from 57 in 2022.
This trend reflects weakened consumer demand which poses risks of economic dislocation and job losses, especially affecting small retailers and service providers. The report further notes that private consumption, which constitutes 60% of India’s GDP, showed only a modest increase of 3.5% in the last quarter of 2023, even as the overall economy grew by 8.4%.
Gulam Zia, director of Knight Frank, highlighted the plight of these smaller malls, noting a significant increase in underperforming retail assets. Approximately 13.3 million square feet of retail space remained vacant in 2023, leading to potential revenue losses estimated at 67 billion rupees ($802.5 million) for developers.
The report detailed that among smaller shopping centers, those with an average leasing area of 100,000 square feet are particularly vulnerable, with their vacancy rates rising to 36.2% in 2023 from 33.5% the previous year. In contrast, larger malls with average leasing areas of 500,000 square feet maintained a stable vacancy rate of 5%, and mid-sized malls reported a 15.5% vacancy rate.
Additionally, in India’s top eight cities, including Delhi, Mumbai, and Bengaluru, the total number of shopping malls declined to 263 in 2023, despite the addition of eight new retail centers, as 16 were shut down. This dynamic underscores the challenges faced by smaller retail establishments in an evolving market increasingly dominated by e-commerce and large-scale retail developments.