India’s retail real estate market is having a bit of a wake-up call right now. Even though we keep hearing about booming consumption and shoppers returning to malls post-pandemic, the ground reality isn’t so rosy everywhere. In fact, a new report suggests that almost one in five shopping centres across the country has quietly slipped into the category of “ghost assets.”
And honestly, once you start looking at the numbers, it’s not hard to see why.
So, What Exactly Is a “Ghost Asset”?
If you’ve ever walked into a mall where half the shutters are down, escalators are humming, but no one’s really on them, and you can literally hear your own footsteps—you’ve basically experienced a ghost asset.
These aren’t abandoned properties. They’re shopping centres that are still open but practically lifeless because of high vacancies, poor tenant mix, or just a general lack of relevance. Sometimes they’re relics of the 2008-2015 mall boom that never quite got the memo that India’s shoppers have moved on.
Knight Frank’s latest ‘Think India, Think Retail – Value Capture: Unlocking Potential 2025’ report looked at 365 shopping centres across 32 cities. Out of these, 74 centres have vacancy levels above 40%, putting them squarely in ghost-town territory. Together, they account for a whopping 15.5 million sq ft of underutilised space.
To put that in perspective—that’s like having hundreds of cricket stadiums’ worth of space just… sitting there.
Why Are So Many Malls Struggling?
There’s no single reason, honestly. It’s more like a perfect storm of bad planning, changing habits, and some old-school real estate stubbornness.
🛍️ Consumers Have Changed Faster Than Malls
People today want curated spaces, not cookie-cutter malls with the same ten brands. They want experiences—arcades, cafés with personality, open spaces, quirky stores. The older centres just couldn’t keep up. Many were built at a time when developers believed “build it, and they will come” was a strategy. Turns out… it wasn’t.
📍 Location Blunders
A lot of shopping centres popped up in areas where demand never really matured. Maybe the neighbourhood didn’t grow as fast as projected, or accessibility remained a mess. Either way, the footfall never matched the glossy brochures.
🛒 The E-commerce Push
We all know this one. As people got more comfortable tapping a screen instead of walking into a store, malls lost some of their pull—especially the ones without strong entertainment or F&B anchors.
🧱 Ageing Malls That Were Never Refreshed
Many of these properties just look tired. The décor feels dated, the lighting looks like it’s stuck in 2010, and the layout often makes you feel like you’re solving a maze, not shopping. Modern shoppers expect more—simple as that.
Where Are These Ghost Centres?
They’re not hiding in remote corners. Ghost malls are scattered across both major metros and smaller cities. Even places like Kolkata have seen newer pockets such as New Town-Rajarhat struggle because the malls there haven’t managed a coherent brand mix or consistent tenant interest.
Interestingly, some Tier-2 cities like Mysuru, Vijayawada, Visakhapatnam and Thiruvananthapuram are actually doing a better job with their good-quality malls than some big metros. Maybe because the competition there is lower, or maybe because developers were more realistic.
But Let’s Be Clear: Not All Malls Are Dying
Here’s the twist—while some malls are practically empty, others are thriving like never before.
Grade-A malls, the ones with the right mix of brands, restaurants, events and, frankly, good vibes, are reporting vacancy rates as low as 5–6%. They’re packed on weekends, parking is full by noon, and people actually want to spend time there.
So, the retail story in India isn’t a doom-and-gloom tale. It’s more like a tale of two cities: the well-run malls doing exceptionally well and the dated ones slowly fading into the background.
Ghost Malls Are a Problem… But Also a Giant Opportunity
Here’s where it gets interesting. These struggling shopping centres might look like liabilities, but they actually hold enormous potential.
The report says about 15 of the 74 ghost centres, which collectively have 4.8 million sq ft, can be strategically repurposed to yield roughly Rs 357 crore annually in rent. That’s not small money—it’s literally hidden gold just sitting there waiting to be unlocked.
What could they be turned into?
- Co-working spaces (this market is exploding)
- Healthcare hubs (multi-speciality clinics or diagnostic centres)
- Education and training campuses
- Experience zones—think gaming arenas, VR parks
- Mixed-use hubs with residential + retail
- Last-mile logistics hubs for e-commerce
The big shift, which developers are slowly accepting, is that malls don’t only have to be malls.
What Developers and Investors Should Really Take From This
Honestly, the message is pretty straightforward: build smarter, not bigger.
A successful retail asset in today’s India isn’t about square footage—it’s about relevance. Developers need to focus on:
✔ smart tenant curation
✔ flexible lease models
✔ experience-driven design
✔ tech-enabled analytics
✔ repurposing rather than rebuilding
And investors who look at ghost malls not as embarrassments but as renovation opportunities may actually end up with some of the best deals of the decade.
The Bottom Line: Retail Isn’t Dying—It’s Evolving (Sometimes Painfully)
If there’s one thing the ghost mall phenomenon tells us, it’s this: India’s retail market is going through a transition. And transitions are messy.
Yes, about 20% of shopping centres are struggling. But the rest of the sector? It’s adapting, growing, and in many places, flourishing. Shoppers haven’t stopped showing up—they’re just showing up where the experience feels worth it.
Ghost malls are simply reminders that the old mall formula doesn’t work anymore. India wants better spaces, not more spaces. And as developers begin to embrace mixed-use, curated, and people-centric designs, we’ll likely see many of today’s ghost centres reinvent themselves into something far more meaningful.
Related
Discover more from NEXTWHATBUSINESS
Subscribe to get the latest posts sent to your email.
