In the bustling cities of India, a haunting trend is emerging – the rise of ghost malls. These once-vibrant shopping complexes now stand vacant, devoid of visitors and life, as shoppers increasingly turn towards online shopping or flock to larger, high-end malls.
According to a recent report by Knight Frank India titled “Think India Think Retail 2024,” the number of ghost malls has surged, with Delhi-NCR leading the count, followed by Mumbai. These ghost malls are characterized by low footfall and high vacancy rates exceeding 40 percent, spelling trouble for small retailers and service providers.
Why the Surge in Ghost Malls?
The shift in consumer behavior towards online shopping and the allure of high-grade malls offering a superior retail experience are key factors driving the abandonment of small shopping centers. Issues like poor design, inadequate management, lack of maintenance, and unattractive exteriors contribute to declining footfall. In contrast, Grade A malls thrive, offering robust occupancy and foot traffic.
Shishir Baijal, Chairman & MD of Knight Frank India, emphasizes the importance of enhancing the retail experience amid rising disposable incomes and urbanization. Consumers seek comprehensive shopping experiences, favoring organized retail spaces over struggling smaller malls.
Cities Grappling with Ghost Malls
Delhi-NCR leads with 21 ghost malls spanning 5.3 million square feet, followed by Bengaluru, Mumbai, Kolkata, Hyderabad, Ahmedabad, Chennai, and Pune. Despite efforts to revitalize or divest underperforming malls, vacancies persist, resulting in significant revenue losses for developers.
The Economic Impact
In 2023 alone, 64 vacant shopping malls accounted for a staggering loss of Rs 6,697 crore in revenue for developers. Gulam Zia, Director of Knight Frank, warns that many small mall owners face closure, unable to compete with larger counterparts in terms of convenience and variety.
Looking Ahead
The phenomenon of ghost malls underscores the evolving retail landscape and the imperative for smaller shopping centers to adapt or face obsolescence. Urban planners, developers, and policymakers must explore innovative strategies to rejuvenate these spaces or repurpose them for alternative uses.
As consumer preferences continue to evolve, the fate of ghost malls serves as a poignant reminder of the relentless march of change in the retail sector. The challenge lies in reinventing these spaces to meet modern demands and revitalize local economies while preserving the essence of community shopping experiences.
