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Holy Cow – 47% Mall Space in India is Vacant

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The Indian economy is in a bad shape, thanks to the atrociously bad government of the ruling Congress party. Not only is the country riddled with corruption but even normal functioning of business has been impaired due to the monstrous red tape. High taxes, byzantine permission processes, an investment freeze etc. has contributed to the economy going to the dogs. The growth rate will go below 4% this year, as the consumers are totally stretched out. High inflation coupled with large job losses and salary cuts has meant that the consumer sentiment is even lower than 2008. This means that the consumer buying rate has gone for a toss and the shopkeepers are hunkering down in the Congress created economic nuclear winter.

An alarming 47% of the mall space is vacant according to Assocham, which is one of India’s biggest industry associations.  Some malls are operating at 10-20% utilization, while for most the average is around 60%. Even anecdotally you can see many of the new malls having a huge number of closed stores. Mall owners are clearly desperate trying to lure big brands with 6 months of free tenancy. Others are closing down and converting into commercial complexes.

Even consumer footfalls during the coming festival season is going to be extremely bad, with expectations of a 35-40% drop which is massive. Note India is a low per capita income country with huge potential for growth given the low capital intensity. Such a big drop is a sign of the governments’ massive failure. The stock market is touching new all time highs as the US Fed continues its crazy $85 bond buying program. This has led to a massive “Risk Hard On” for global hedge funds and big funds. Emerging market securities are back in flavor despite no change in fundamentals (they have only gotten worse). As Citi’s ex CEO said “You got to party while the music is on”….


Amid the prevailing gloom and uncertainties of Indian economy in the days ahead, Diwali, arguably the biggest festival of the country, may turn out to be a damp squib. Industry chamber Assocham on Thursday said malls are likely to see a 35-40 per cent decline in footfalls.The slowdown, job cuts and devaluation of the rupee against the dollar is also making imported raw material and finished goods costlier.More than 47 per cent of the total mall space in nine cities is vacant. Some malls are operating at 60 per cent occupancy, others are struggling with less than 20 per cent.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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