Delhi, Mumbai, or Bengaluru? Which city has maximum ghost mall stock in India?
3 min read 14 Sep 2022, 12:58 PM ISTA total of 57 malls across top-8 cities in India are currently in different stages of dilapidation
PremiumAs the Covid-19 pandemic abates, the malls in India have begun to witness an accelerated rebound in footfall. However, certain malls have remained just empty structures with no shops and, therefore, no crowd. According to the latest report by Knight Frank, an international property consultant, in the past few years a lot of ghost malls" have sprung up" in the organized retail sector in India.
Knight Frank's "Think India, Think Retail 2022 - Reinventing Indian Shopping Malls" report stated that as many as 21% or 57 malls across top-8 cities in India are currently in different stages of dilapidation. These 57 ghost malls comprise nearly 8.4 million sq ft in gross leasable space, the report mentioned.
A mall with a vacancy of more than 40% is considered to be a "ghost mall" as per the Knight Frank report.
In some of these malls, termination notices have been served to shut down large format stores which comprised an entire mall, in other cases, discontinuation of operations, demolition of shops inside the mall premises, and auctioning of the mall property due to non-payment of dues to the local mall authority are also underway.
The national capital region (NCR) has the largest 3.35 million square feet of space occupied by ghost malls, as per the report. IT city Bengaluru has 1.38 million sq.ft of space occupied by ‘ghost malls’ and followed by Hyderabad and Mumbai at 1.14 million sq ft and 1.13 million sq ft space, respectively. The other Indian cities where ghost malls are located are Ahmedabad (0.37 million sq ft); Pune (0.37 million sq ft); Kolkata (0.32 million sq ft), and Chennai (0.33 million sq ft), respectively.
Why India has so many ghost malls?
According to the report, there are multiple factors behind the stocks of ghost malls in the country. These include: 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.
Repurposing ghost malls:
It is imperative that such malls, though unusable for the purpose for which they were constructed are reinstated, as an enormous amount of capital is trapped in such assets. Here are some solutions the report suggested:
1. Lease out empty spaces for long-term commercial use to local businesses which cannot afford high rents in prime office business parks or popular business districts. Warehousing can also be considered in such malls as large floor plates with vacant spaces are available.
2. Short-term leasing for temporary occupancy such as community events, birthday parties, cultural shows during festival periods and corporate events.
3. Transformation into community spaces and rebranding as entertainment and play hubs with options such as multiplex theatres, dedicated toddler and soft play areas, bungee soccer, bowling alleys, indoor cricket grounds, video game arcades, VR gaming, mini golf, cocktail lounges, and a diverse F&B retailer mix.
4. Lastly, demolition of the existing structure and sale of land to minimise the losses or construction of a conventional residential complex or commercial space structure which will have a better probability of occupancy once completed.
Repurposed Mumbai mall:
The report highlighted that a mall in Mumbai, built in 2006, has now been repurposed into a full-scale retail destination as the property dealt with poor financial economics.
Mumbai's Atria Mall was initially positioned as a high-end retail property. The mall owners made changes to the mall layout and format, converting it into a full-scale retail destination. Since the catchment is strong, the opening of a cinema and the entry of a French sporting goods retailer, have helped the mall repurpose itself as a retail destination once again. It has attracted food and beverage and a mix of accessories and apparel
retailers, amongst others.
