Inside Delhi's ghost malls: A struggle to stay relevant in retail landscape

Amidst the bustling urban landscape of South Delhi, a once-vibrant shopping hub now lies desolate, a haunting reminder of its former glory. Spanning 35 acres, Ansal Plaza, one of the oldest malls in the region, today echoes with emptiness.

Located in Andrews Ganj, it opened in 1999, and for years, it drew hundreds of people to its three-storey Shoppers Stop on weekdays and weekends alike. You had to be lucky to find a table at its McDonald’s outlet. Young couples, groups of friends, and families with children sitting on the steps of its amphitheatre, with ice-cream cones or crispy corn cups, were a common sight.

 

Not anymore.

Ansal Plaza’s decline paints a grim portrait of neglect, and hints at a larger trend plaguing several shopping centres across the country. The plaza shares its plight with many other shopping centres across the Delhi National Capital Region (NCR), which have come to be called “ghost malls” — those with more than 40 per cent of retail space vacant. 

The Grand Venice Mall in Noida, with its Italian aesthetic, stands as another striking example. Its gondola rides, bowling alleys, and snow-themed parks are no longer the draw they once were. Similarly, the JMD Kohinoor Mall in Greater Kailash struggles to find its place amidst shifting consumer preferences. According to a recent report by Knight Frank, a real estate consultancy firm, ghost shopping centres increased by 59 per cent in 2023 compared to the year before. Delhi NCR has the largest share of such shopping centres among Tier 1 cities, with 5.3 million square feet (msf), up 58 per cent from 3.4 msf in 2022. The decline of these malls is a result of various factors, including oversaturation, changing consumer behaviour, poor management, strata ownership, and obsolete design or concept.

“Addressing these challenges requires strategic planning, innovation, and adaptation to remain relevant in today’s retail landscape,” said Vivek Rathi, national director-Research, Knight Frank India.

Mall management

Poor management by mall authorities appears to be a significant reason for the decreased footfall, which eventually hurts sales and forces retailers to vacate their shops. 

The store manager of an eatery in the quiet alleys of Ansal Plaza noted a drastic reduction in traffic. “We mostly receive orders through Zomato, from nearby areas. The mall hasn’t been taking any initiatives to attract new shoppers,” said the manager, who wished to remain anonymous. He estimated the average daily footfall in Ansal Plaza at 300.

A spokesperson for Shaw Brothers, which deals in pashmina and has had a shop at Ansal Plaza since 2000, said sales had declined by 80 per cent. “There are hardly any buyers. Even if people visit the mall, it is mostly for its spas and clubs,” he said. “There is only one functional washroom. Any complaint to the authorities goes unnoticed as long as the rentals are coming.”

French sporting goods retailer Decathlon temporarily boosted the footfall in Ansal Plaza, but it shut down some months ago. 

Emails sent to Decathlon India, Ansal Group, JMD Group, and Grand Venice Mall did not elicit a response until press time.

Challenges of strata ownership

One of the primary factors contributing to the sustained struggle of these malls is the challenge of reaching a consensus among multiple landlords. Most of these structures are sold to multiple owners, making it difficult to get all parties to agree on either selling out or committing to the operating expenses necessary to run the mall properly. 

Rathi says the sunk cost fallacy also plays a role in prolonging the life of such properties that have endemic issues. (Sunk cost fallacy is wherein investors are reluctant to abandon a project because they have invested heavily in it.)

Hot hubs

While some malls are struggling, others are thriving. 

According to the Shopping Centres Association of India, Saket’s Select Citywalk boasts an occupancy rate of 100 per cent, with an average footfall of 12,000 to 14,000 on weekdays and 22,000 to 25,000 on weekends. 

Vegas Mall in Dwarka has an occupancy rate of 98 per cent, and houses more than 184 national and international brands. It gets around 26,000 visitors on weekdays and 50,000 on weekends. 

DLF Promenade in Vasant Kunj enjoys 97 per cent occupancy, with an average footfall of 25,000 on weekdays and 39,000 on weekends.

The stark contrast in the footfall at Vaishali’s Ansal Plaza, ranging from 300-450 on weekdays and approximately 500 on weekends, highlights the broader trend of consumers increasingly seeking luxury brands and experiential retail. “Whatever crowd we have here is because of Vishal. The opening of Miraj Cinemas has also helped,” said Lucky Saxena, department manager of the Vishal Mega Mart outlet here.

Consumers and retailers alike are looking for more than just shopping; they seek experiences, which include entertainment, food, and quality retail brands, according to Anshuman Magazine, Chairman and Chief Executive Officer-India, South-East Asia, Middle East & Africa, CBRE.

A salesperson for Safari at Ansal Plaza, Vaishali, said that even though the mall was considered a factory outlet, offering heavy discounts, there were not many takers. 

To a question on why they continued to operate out of such locations, he said, “Since retailers invest a lot in their shops, moving to a different location is difficult.” Big brands, he added, managed to recoup their losses through different stores and online channels, but small stores, or pop-up shops, could not afford this.

Despite the minimal visitors, shop-owners complain that rental rates remain high. Swati Tiwari, a jewellery designer at IAMA Jewels in JMD Kohinoor Mall, said the high rentals persisted due to its upscale location in Greater Kailash.

Out of the box 

With customers spoilt for shopping and entertainment avenues, malls are employing different strategies to keep them interested. Spectrum Metro High Street Mall in Noida, for instance, offers parking convenience to its customers. 

“We are constantly organising events, deploying effective marketing strategies, and providing entertainment options,” said Ajendra Singh, Vice President-sales and marketing, Spectrum@Metro. The mall receives 10,000 to 15,000 visitors a day, and has an occupancy rate of 60 per cent.

Shopping centres such as these know that the picture can rapidly turn if consumer preference shifts. Malls like Ansal Plaza are a constant reminder.