Ghost malls Of India have caused a loss of $524 million
Ghost malls Of India have caused a loss of $524 million. A sum of 57 shopping centers across the main eight urban communities in India lie to a great extent unused.
The biggest number of phantom shopping centers are in Delhi NCR, Pune and Hyderabad.
Aside from the phantom shopping centers, the general shopping center wellbeing has worked on post pandemic with their numbers expanding from 255 out of 2018 to 271 at present.
Coordinated retail deal volumes expected to reach $136 billion by FY28.
Ghost malls Of India
A total of 57 malls, or 21% malls, across the top eight cities in India are in a dilapidated state and have resulted in a loss of over $524 million, according to Knight Frank India’s latest report ‘Think India, Think Retail 2022’.
If a mall is vacant more than 40%, it’s defined as a ‘ghost mall’. The highest number of ghost malls are in Delhi NCR , followed by Pune and Hyderabad.
Lack of due diligence, mall shortcomings such as size and ownership patterns, design issues, faulty layouts with dark alleys, lack of customer walk flow management, low occupancy and lack of anchor tenants — have all contributed to the creation of these ghost malls.
Ghost malls Of India
All attempts to breathe life into these assets and attract a good retailer mix and footfalls have been unsuccessful. As a result, the revenue generation potential of such malls is far below the expected threshold.
Termination notices have been served to shut down a few large format stores which comprised an entire mall. Discontinuation of operations, demolition of shops inside the mall premises. Auctioning due to non payment of dues are also underway.
Suggestions for utilising these ghost malls:
It can be used for exhibition, event organising, Daycare, elder care, pet care and even for schools. Workforce training centres and human development centres for government services can also spring up in ghost malls.
Leasing out empty spaces for long-term commercial use to local businesses. Demolition of the existing structure and sale of land is another suggestion.
Malls witnessing growth despite rise of e-commerce
Despite the rise of e-commerce, India’s physical stores still account for 95% of retail business, the report claimed. The retail industry will continue to account for 10% of India’s GDP for the next five financial years. The organised retail sales grew at a CAGR of 24% between FY 2017- 22.
The organised retail sector in India, despite taking a hit during the pandemic, is still growing. Post Covid, the recovery in operational metrics of malls has been healthy, with consumption in January-June 2022 growing 20-25% from the same period in FY2020.
“With this large-scale pent-up demand, shopping centre development has seen a new rigour after being at a standstill for almost 2 years. Tier 2 and 3 cities are also ready to support mid to large scale mall developments.
New Delhi, Mumbai and Bangalore have the maximum number of malls, with Hyderabad performing the best in maximum occupancy in Grade A or premium malls.
India has a total mall area spread across 92.9 mn sq ft in 271 operational malls in the top eight markets – Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, National Capital Region (NCR) and Pune.
