Fifty-seven, or 21 percent, of the 271 operational shopping malls in India are in a dilapidated state and need immediate rescue, international property consultant Knight Frank has said in a report.
The research report, which terms these shopping centres as ghost malls, says the 57 malls comprise nearly 8.4 million square feet (sq ft) in gross leasable space. All attempts to breathe life into them and attract a good retailer mix and footfalls had been unsuccessful.
The national capital region (NCR), which includes Delhi, Gurugram and Noida, has the largest 3.35 million sq ft of space occupied by such malls, the report said.
“Some of the shopping mall assets developed in the golden era of mall development in India were in for a reality check by the dusk of 2008, when India was hit by the global recession. Developers who had jumped into the mall development business without any understanding of the demographics and demand were biting their nails,” says the report.
As a result, in the past few years, a lot of ghost malls have sprung up in the organised retail sector in India, it says.
Bengaluru has 1.38 million sq ft of space occupied by “ghost malls” followed by Hyderabad and Mumbai at 1.14 million sq ft and 1.13 million sq ft space, respectively.
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Among the top eight cities identified by the report, Pune and Ahmedabad have 0.37 million sq ft of space each, Chennai about 0.33 million sq ft and in Kolkata 0.32 million sq ft of space occupied by ghost malls.
The report says multiple factors such as lack of due diligence, mall shortcomings such as size and ownership patterns, design issues, faulty layout with dark alleys, lack of customer walk flow management, low occupancy and lack of anchor tenants were the reasons these spaces were struggling.
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The report also stresses on reinstation of these malls, citing the huge amount of assets trapped.
“Renovation and repurposing them into alternate uses can be one option as such assets are usually built on coveted land parcels in locations to vie for and can be monetised if strategised appropriately,” it added.
As per the Knight Frank report, India has a total mall stock of 92.9 million sq ft spread across 271 operational malls in the top eight markets– Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, National Capital Region (NCR) and Pune.
As of the first half of 2022, NCR contributed nearly one-third, or 34 percent, of India's total mall stock, which is the highest across the top eight markets.
Mumbai contributed 18 percent and Bengaluru 17 percent among the top eight cities.
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