Empty complexes… no visitors… faint sounds… these are the situations faced by retailers in many small shopping malls in the country. Many malls are turning into ghost malls amidst changing consumer priorities. Major cities in the country are witnessing an increase in ghost shopping malls. Malls with more than 40 percent vacancies are termed as ghost malls. The number of such malls is increasing gradually, as per the latest report by Knight Frank India.
In 2022, there were 57 ghost malls… by 2023, they increased to 64. Changes in consumer priorities, the rise of online shopping trends are cited as the main reasons for small shopping complexes remaining empty. Additionally, factors like poor design, incompetent management, dilapidated buildings, intense competition from high-grade malls, which are favorable to retailers or brands, are also mentioned as reasons for the decrease in the number of visitors to small shopping complexes. In the country’s major cities, out of 125.1 million square feet of retail space, 64 malls have turned into ghost malls. Delhi has the highest number of ghost malls with 21… followed by 12 in Bangalore, 10 in Mumbai, 6 in Kolkata, 5 in Hyderabad, 4 in Ahmedabad, and 3 each in Chennai and Pune. However, only Hyderabad has seen a reduction of 19 percent in the stock of ghost shopping centers.
The rise of ghost malls caused a loss of Rs. 6,700 crore in 2023, according to Knight Frank’s analysis. This indicates a significant economic impact on the retail sector. Furthermore, with the closure of 16 shopping centers in 2023, the total number of shopping centers decreased to 263 in Tier-1 cities. Developers either converted residential or commercial developments or deliberately demolished unprofitable shopping centers. Some were simply shut down.
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