India’s ‘ghost malls’ hold ₹357-crore rental potential, says Knight Frank report
Knight Frank said across 365 shopping centers surveyed, across 134 mn sq ft of overall stock, 74 have been classified as ghost assets with 40% vacancy level
Nearly one-fifth of India’s shopping centres have slipped into ‘ghost mall’ status, but reviving even a small portion of this dormant stock could unlock ₹357 crore in annual rentals, according to Knight Frank India’s retail study, Think India, Think Retail 2025 – Value Capture: Unlocking Potential.
The report said that across 365 shopping centres surveyed, translating 134 million sq ft of overall stock, 74 have been classified as ghost assets with a vacancy level of 40% or above, 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 ₹357 crore in annual rental revenues if reinvigorated effectively for reinvigoration. Of the 15 shortlisted assets with clear reinvigoration potential, Tier 1 cities hold an opportunity of ₹236 crore in annual rentals across 2.9 million sq ft, while Tier 2 cities add another ₹121 cr to the reinvigoration landscape across 2 million sq ft,” the report said.Also Read: 5 things you need to know about India's ghost shopping malls and the challenges faced in repurposing them
Tier 1 cities lead the revival opportunity
Knight Frank noted that Tier 1 cities account for ₹236 crore of the potential annual rentals, with Tier 2 cities contributing ₹121 crore. Despite being home to India’s most established malls, Tier 1 markets also host the bulk of dormant stock, 11.9 million sq ft of the 15.5 million sq ft identified.
“India’s retail sector is entering a defining phase of growth,” said Shishir Baijal, Chairman and Managing Director of Knight Frank India. He said that unlocking the value trapped in 4.8 million sq ft of dormant stock offers a “substantial opportunity” for developers. With Grade A malls operating at just 5.7% vacancy, Baijal said the broader market is “exceptionally well placed for future expansion.”
The report notes that redevelopment, new ownership structures, and adaptive reuse are helping Tier 1 cities reduce their inventory of ghost malls, particularly through conversions into mixed-use hubs, co-working centres and community spaces.
Tier 2 cities are also outperforming
Despite the ghost mall challenge, the report said that some Tier 2 cities are outperforming metros on fundamentals. Mysuru, Vijayawada, Vadodara, Thiruvananthapuram and Visakhapatnam emerge as the strongest shopping centre markets, each operating with near-full occupancy and healthy tenant mixes.
Mysuru leads with just 2% vacancy, driven by limited supply and consistently strong footfalls. Vijayawada and Vadodara follow closely, supported by calibrated supply addition and steady consumer spending.
On the other hand, Nagpur (49% vacancy), Amritsar (41%), and Jalandhar (34%) illustrate the consequences of oversupply, poor planning and weak anchor presence. Knight Frank notes that in such markets, “multiple large centres compete for the same tenants,” resulting in chronically under-occupied malls, it said.
The study also highlights widening polarisation. Grade A malls enjoy single-digit vacancies, while Grade C assets face vacancy levels of up to 36%.Also Read: 59% increase in ghost shopping centers; low performing malls lock up value of ₹6700 crore
West and south dominate the reinvigoration potential
Almost 44% of India’s ghost malls lie in the West, and together with the South, these regions account for 77% of the ₹357-crore opportunity. The top eight cities alone contribute 66% of the projected rental gains, underscoring the importance of well-located but ageing centres ripe for redevelopment.
The top eight cities include, Bengaluru, Chennai, Hyderabad, Mumbai, Delhi-NCR, Ahmedabad, Nagpur, and Thiruvananthapuram.
With a 5.86% rental yield and rising demand for experience-led retail, Knight Frank said that revitalising older centres, often cheaper than new development, can rapidly generate value-accretive cashflows.
India’s retail environment is meanwhile becoming more format-differentiated. Shopping centres have the most balanced mix of brands, with 67% Indian and 33% international labels, making them the key entry point for global retailers. High streets remain dominated by domestic players (86% Indian brands), while airports maintain a premium mixed portfolio.
Overall retail vacancy across the 32 cities stands at 15.4%, but Knight Frank stressed that the real issue is the scarcity of high-quality retail space, especially in Tier 2 markets where demand is rising faster than supply.
The report said that shopping centres offer the most globally balanced retail mix, with Indian brands making up 67% of tenants and international brands contributing a strong 33%. This blend positions malls as the primary entry point for global retailers looking to tap into India’s expanding consumer base.
High streets, meanwhile, remain firmly rooted in domestic retail culture. With Indian brands occupying 86% of the space and international labels accounting for only 14%, these streets reflect hyper-local shopping habits and a strong legacy-driven appeal that continues to anchor their identity.
Airports sit between these two extremes, featuring a 70:30 split between Indian and international brands. Their premium, captive traveller audience naturally attracts a higher share of global labels. Together, these formats show how malls and airports are accelerating international brand growth in India, while high streets continue to reinforce the country’s homegrown retail strength, it said.
