(MENAFN- KNN India) New Delhi, May 8 (KNN) India's retail real estate woes deepened in 2023 as the area occupied by ghost shopping centres - malls with over 40 per cent vacant leasable space - surged by a worrying 59 per cent to 13.3 million square feet, leaving a massive Rs 6,700 crore worth of rental space unutilised.
This stark finding was revealed in Knight Frank's annual "Think India Think Retail" report released on Tuesday, which studied 340 malls and 58 high streets across 29 major cities.
The number of such non-performing or ghost shopping centres escalated from 57 in 2022 to 64 last year.
The National Capital Region bore the brunt, housing a staggering 5.3 million sq ft of ghost mall spaces - a 58 per cent spike compared to the previous year.
Financial capitals Mumbai and Bengaluru followed with 2.1 and 2 million sq ft respectively of underutilised rental area in failed malls.
"With an estimated Rs 6,700 crore trapped in the unproductive leasable space of these dilapidated centres, consolidation by institutional investors and decisive redevelopment initiatives are imperative to revive capital locked in unviable assets," the report urged.
Hyderabad was the sole bright spot among tier-I cities, witnessing a 19 per cent reduction in its ghost mall footprint. In contrast, Kolkata recorded a sharp 237 per cent surge although from a relatively low base of 0.3 million sq ft in 2022.
While overall vacancy rates improved marginally to 15.7 per cent across the top 8 cities from 16.6 per cent in 2022 - indicating some recovery in retail demand - the report advocated excluding failed malls to better reflect market dynamics. Excluding ghost centres, the vacancy rate was a more robust 7.4 per cent.
Looking ahead, the report estimated India's shopping centres could generate USD 14 billion in revenue during FY 2024-25, underscoring the need to revive unproductive retail spaces through asset restructuring to capitalise on this growth potential.
(KNN Bureau)
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