Mumbai: Knight Frank India has released its flagship retail report, Think India, Think Retail 2025 – Value Capture: Unlocking Potential, offering one of the most comprehensive retail real estate mappings across 32 Indian cities. A key finding reveals that nearly one-fifth of the country’s operational shopping centres have slipped into the category of “Ghost Malls”—underperforming retail assets marked by high vacancies, weak tenant curation, and outdated infrastructure.
Of the 365 shopping centres surveyed, 74 malls—spanning 15.5 million sq. ft.—have been classified as ghost assets. Within this, 15 centres covering 4.8 million sq. ft. have been identified as high-potential malls capable of unlocking INR 357 crore in annual rental revenues through reinvigoration. Tier 1 cities contribute INR 236 crore of this potential, while Tier 2 cities add INR 121 crore.
The report highlights that the ghost mall issue is not confined to smaller markets. Tier 1 cities account for 11.9 million sq. ft. of dormant stock, signalling that even early, established malls are struggling to keep pace with evolving retail preferences, modern brand formats, and the rising demand for experience-led centres. Tier 2 cities hold the remaining 3.6 million sq. ft., where operational inefficiencies and lack of anchor tenants have hindered performance.
Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “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, which 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 exceptionally 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.”
Ghost Stock Distribution and Emerging Trends
Grade C malls and older developments—especially those in peripheral locations—face the highest risk of obsolescence unless repositioned as mixed-use or community-driven assets. Knight Frank notes that Tier 1 markets have begun showing early signs of recovery, with redevelopment, new ownership models, and design upgrades reducing the number of ghost malls.
Of the INR 357 crore reinvigoration potential identified, the West region leads with a 40% share, followed by the South (31%), North (26%), and East (3%). The top eight Indian cities collectively account for 66% of the rental opportunity.
Market Performance: Leaders and Laggards
The report marks significant disparity across cities:
Top-performing markets (lowest vacancy levels):
- Mysuru (~2%) – Limited organised retail supply driving near-full occupancy
- Vijayawada (~4%) and Vadodara (~5%) – Balanced supply-demand dynamics
- Thiruvananthapuram (~6%) and Visakhapatnam (~6%) – Strong demand matched with well-managed centres
Underperforming markets:
- Nagpur (~49%) – Oversupply far exceeding retailer demand
- Amritsar (~41%) and Jalandhar (~34%) – Overbuilt retail landscapes with inadequate demand depth
India’s Retail Landscape: Polarisation Widens
While India’s overall retail vacancy stands at 15.4%, the gap between Grade A and lower-grade malls continues to stretch. Grade A centres maintain strong occupancy and robust footfalls, driven by upgraded formats and refreshed brand mixes. Grade C malls, however, record vacancy levels as high as 36% due to outdated layouts, poor tenant strategy, and anchor exits.
High streets remain dominated by Indian brands (86%), while shopping centres host a balanced mix of Indian (67%) and international (33%) brands. Airports continue to support a premium retail blend with a 70:30 Indian–international brand ratio.
A Sector Poised for High-Value Recovery
Knight Frank’s analysis underscores that revitalising dormant malls—often at a lower cost compared to greenfield development—can deliver strong and immediate returns. With increasing urban consumption, rising disposable incomes, and expanding retail aspirations beyond metros, India’s dormant retail assets represent a significant value-capture opportunity.
As the report indicates, strategic reinvigoration, improved management, curated leasing, and design-forward redevelopment will be instrumental in shaping the next phase of India’s organised retail growth story.
