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Knight Frank India's latest report has identified 74 operational shopping centres as 'ghost malls,' each over three years old and still recording vacancy above 40%. Together, they account for 15.5 million sq ft of underperforming retail space marked by outdated layouts, weak tenant mixes and declining customer relevance. Of these, 15 malls totalling 4.8 million sq ft are considered suitable for redevelopment and could generate an estimated INR 357 crore in annual rent if refurbished. Chairman Shishir Baijal said India's retail sector is entering a defining phase, with Grade A malls showing low vacancies and strong absorption in Tier-II cities. Revamping ageing malls will be key to supporting future organised retail growth.
India's retail real estate sector has come under fresh scrutiny after Knight Frank India, in its latest report titled Think India Think Retail - Value Capture: Unlocking Potential, identified 74 operational shopping centres as 'ghost malls'. The consultant's assessment covered 365 retail properties across 32 cities, providing one of the most detailed evaluations of the country's mall landscape. Advertisement
According to the findings, the centres categorised as ghost malls were those that have completed more than three years of operations yet continue to record vacancy levels exceeding 40 per cent of their total leasable area. Collectively, these 74 underperforming assets account for approximately 15.5 million sq ft of retail space. Knight Frank noted that such properties are typically characterised by outdated layouts, poor tenant mix, and a gradual decline in consumer relevance, making them increasingly challenging to revive through conventional leasing strategies.
A smaller group of 15 centres within this category-totalling 4.8 million sq ft-has been deemed suitable for retrofitting and redevelopment. The consultant observed that these assets could potentially generate annual rental income of around INR 357 crore if refurbished effectively, indicating the scope for value recovery through modernisation and improved asset management.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, remarked that the country's retail sector is currently in a 'defining phase' supported by robust consumption levels and a clear market shift towards high-quality organised retail formats. He noted that Grade A malls are operating with vacancy levels of only 5.7 per cent, while several Tier-II cities have reported strong absorption trends, reflecting sustained demand for well-managed retail destinations.
He added that as consumer expectations evolve and national and international brands expand their presence, the revitalisation of ageing centres through redevelopment or adaptive reuse will be essential in supporting the sector's next chapter of growth. The report emphasised that repositioning weak assets, updating infrastructure, and curating stronger tenant mixes will be critical in restoring the commercial viability of distressed malls.
Source - PTI
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