In India, ghost shopping centres spiked 59% to 13.3 million square feet (msf) in 2023 compared to the year before, a report said on Tuesday.

These are called ghost shopping centres because over 40% of their retail space is vacant.

Real estate consultancy Knight Frank has released a report titled “Think India Think Retail 2024” that studied 340 shopping centres and 58 high streets in 29 Indian cities.

There were 64 ghost shopping centres in 2023, up from 57 in 2022 leading to a value loss of Rs 6,700 crore, it said.

“As nearly $798 million (Rs 6,700 crore) is trapped in the gross leasable space of these non-performing shopping centres, consolidation of retail asset portfolios by institutional investors…proactive steps by mall developers to either repurpose or demolish these structures will provide new opportunities for interested players for land monetisation,” said the report.

In the city-wise analysis, the report said that in Tier-I cities, the largest inventory of ghost shopping centres was in the National Capital Region (NCR) at 5.3 msf, which was 58% higher than the 3.4 msf in 2022.

Further, Mumbai followed with 2.1 msf and Bengaluru was third with 2 msf of ghost shopping centres.

The report said Hyderabad was the only Tier-1 city to record a decline in ghost shopping centre inventory, dropping 19% to 0.9 msf in 2023.

The sharpest rise was in Kolkata, which recorded a 237% spike to 1.1 msf, but from a low base of 0.3 msf in 2022.

On a positive side, the report highlighted that the overall shopping centre vacancy in eight major Indian cities improved to 15.7% in 2023 from 16.6% in 2022.

Excluding ghost shopping centres, the vacancy rate in the segment improved to 7.4%.

“It is prudent to exclude such assets, as this stock does not attract widespread retailer interest due to various constraints, including poor location, obsolete design, strata-sold arrangements, and the dilapidation and unattractiveness of the structures,” said the report.

Shopping centres in 29 Indian cities have the potential to generate $14 billion in revenue in the Financial Year 2024-25.