DELHI-NCR HAS 23 GHOST MALLS

Team L&M

As many as 23 malls in Delhi-NCR are ghost malls, which is the highest in any city in India. And of these only one, in Greater Noida shows signs of revival. Also, as against Tier 1 cities, Tier-2 cities have minimal ghost shopping centre stock, including Bhubaneswar, Nagpur, Bhopal, Jaipur, Kochi, and others.

These are the findings of the latest study done by Knight Frank India, an independent, global property consultancy, on the retail potential in the country. The Knight Frank India report titled, Think India, Think Retail 2025 – Value Capture: Unlocking Potential, presents the most extensive mapping of the country’s retail real estate across 32 cities.

As per the report, nearly one-fifth of India’s operational shopping centres fall into the category of ‘Ghost Malls’ — assets marked by high vacancies, weak tenant curation, ageing infrastructure, and declining relevance.

“Across 365 shopping centres surveyed, 74 have been classified as ghost assets, representing 15.5 million square feet (mn sq ft) of dormant retail potential. Within this pool, 15 centres with a combined area of 4.8 mn sq ft have been identified as high-potential assets that could deliver as much as INR 357 crore (cr) in annual rental revenues if reinvigorated effectively,” says Ankita Sood, National Director- Research, Knight Frank India India.

“Of the 15 shortlisted assets with clear reinvigoration potential, Tier 1 cities hold an opportunity of INR 236 crore in annual rentals, while Tier 2 cities add another INR 121 cr to the reinvigoration landscape,” she adds.

The all-prevalent malady

The study reveals that the ghost mall challenge is not confined to smaller cities or emerging markets.

Tier 1 cities account for 11.9 mn sq ft of this dormant stock, indicating that even some of the country’s earliest and most established malls have struggled to keep pace with changing consumer expectations, shifting brand strategies, and the evolution of modern, experience-led retail formats.

But, with redevelopment, new ownership models, design upgrades, and alternate-use conversions bring ageing assets back to life. Tier 1 cities are now beginning to see a decline in ghost shopping centres. “And, with focused interventions, improved management, and curated leasing, ghost malls can be repurposed into viable, future-ready assets that support the next phase of India’s retail growth,” says Sood.

How Tier 2 cities  fare

Tier 2 cities contribute the remaining 3.6 mn sq ft, where operational inefficiencies, inconsistent management practices, and limited anchor presence have restrained shopping centres from reaching their full potential.

Says Shishir Baijal, Chairman and Managing Director, Knight Frank India, “India’s retail sector is entering a defining phase of growth, supported by strong consumption and a clear shift toward high-quality organised retail formats. Our analysis shows that reinvigorating 4.8 mn sq ft of dormant mall stock could unlock INR 357 cr in annual rentals. This is a substantial opportunity for developers and investors. With Grade A malls operating at only 5.7 percent vacancy and several Tier 2 cities demonstrating strong absorption trends, the sector is well placed for future expansion. As consumer demand evolves and brands scale their footprint, revitalising older centres through redevelopment or adaptive reuse will play a pivotal role in shaping the next chapter of India’s retail transformation.”

Polarisation continues in retail real estate

Significantly, the retail real estate is becoming increasingly polarised. While Grade A malls record high occupancy, strong footfalls, and robust brand mixes, ageing and poorly designed centres from the early 2,000s face declining relevance due to structural flaws, weak catchment planning, outdated formats, and anchor tenant exits. Vacancy across 32 cities stands at 15.4 per cent, yet the real challenge is a shortage of quality space, especially in Tier 2 cities.

Vacancy in Shopping Centres

In contrast, markets with ageing malls, fragmented ownership, or design inefficiencies demonstrate higher vacancy levels and weaker brand penetration. The analysis shows that vacancy across all shopping centres in the 32 cities stands at 15.4 per cent, but this headline number masks a clear structural divide: Grade A centres enjoy single-digit vacancies driven by steady demand and robust performance, whereas Grade C assets experience vacancies as high as 36 per cent. High streets in many cities continue to thrive, driven largely by Indian brands, while airports maintain a strong mix of premium international and domestic retailers. Overall, the Retail Pulse points to a market where demand is strong, consumer aspirations continue to rise, and the most significant opportunity lies in expanding and upgrading quality retail infrastructure to keep pace with evolving expectations.

Shopping Centre Performances across Cities

Across 32 Indian cities, the report reveals a dynamic, yet uneven retail landscape defined by strong demand for quality spaces and widening disparities between Grade A and lower-grade centres. Tier 1 cities account for 73 per cent of India’s shopping centre stock, but several Tier 2 cities such as Mysuru, Vijayawada, Vadodara, Thiruvananthapuram, and Visakhapatnam have performed remarkably with near-full occupancy and balanced tenant mixes, highlighting growing appetite for organised retail beyond metros.

High performing Markets based on Vacancy

• Mysuru (vacancy ~2%) – A tightly supplied market with very limited organised retail space. The scarcity of shopping centres relative to demand ensures that any quality centre attracts strong footfalls and remains almost fully occupied.
• Vijayawada (vacancy ~4%) and Vadodara (~5%) – Both are mid-sized cities with steady growth in consumer spends, yet new retail supply has been introduced cautiously. This equilibrium means the existing shopping centres face less competition, keeping vacancies low and retailer interest high.
• Thiruvananthapuram (~6%) and Visakhapatnam (~6%) – Southern India’s rising retail stars, where robust consumer demand meets a new generation of well-managed shopping centres. These cities have benefited from avoiding overbuilding; each new centre has strong anchors and caters to an eager customer base, resulting in consistently high occupancy.

Underperforming Markets based on Vacancy

• Nagpur (vacancy ~49%) – Nearly half of this city’s shopping centre space lies empty. A spate of development in anticipation of future demand overshot what Nagpur’s consumer base could absorb. Excess capacity, combined with only modest growth in retailer interest, has led to centres that never achieved critical mass and languish with high vacancies.
• Amritsar (~41%) and Jalandhar (~34%) – In these cities of Punjab, developers built too many shopping centres in proximity, outpacing the depth of viable retail tenants. Though consumer appetite exists, when multiple large centres compete for the same set of brands, none can sustain healthy occupancy. The result has been chronically half-empty properties as retailers cherry-pick only the top-performing locations.