Achi news desk-
GUWAHATI: Small malls in India are increasingly becoming ghost malls as consumers shift towards online shopping and larger retail centers for enhanced experiences, according to a consultancy report released on Tuesday, May 7.
Also read: Many disenfranchised in Guwahati
These ghost malls, defined as properties with a vacancy rate exceeding 40%, saw a marked increase, reaching 64 in 2023 from 57 the previous year, as highlighted by real estate consultancy Knight Frank India.
This trend reflects a decline in consumer demand and raises concerns about potential job losses and economic consequences, particularly affecting small retailers and service providers.
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Private consumption, which accounts for 60% of India’s GDP, has shown sluggish growth, rising just 3.5% year-on-year in the last quarter of 2023, even as the overall economy expanded by 8.4%. Abir Frank’s managing director, Ghulam Zia, expressed concern over the precarious situation which many small shopping centers are facing, and stated that many of them are on the verge of closing.
God "Think India Think Retail 2024" The report, based on a survey of 29 major cities, reveals a significant increase in underperforming retail properties, with 13.3 million square feet of shopping space remaining vacant in 2023, resulting in a loss of 67 billion rupees ($802.5 million) in revenue for developers.
Struggling to compete with the convenience and variety offered by larger malls, many small mall owners find themselves in a downward financial spiral, Zia notes. Among small shopping centers with an average leasable area of ​​100,000 square feet, 132 are at risk of becoming ghost malls, with the vacancy rate rising to 36.2% in 2023 from 33.5% the previous year.
In contrast, larger malls with an average leasable area of ​​500,000 square feet maintain a low vacancy rate of 5%, while mid-level shopping centers display a vacancy rate of 15.5%.
In the top eight cities, including Delhi, Mumbai and Bengaluru, the total number of malls will drop to 263 in 2023, with eight new retail centers added but 16 closed.
