Mumbai : India’s Grade A/A+ retail market is witnessing a historic tightening of supply, with top-tier destination malls in Delhi-NCR and Mumbai (MMR) effectively reaching full occupancy.
According to the report ‘Leasing Trends in Malls Across Top Metropolitan Cities in India’, by ANAROCK and Images Group unveiled at the Phygital Retail Convention in Mumbai today, vacancy rates in Delhi’s key assets have plummeted to 0–2%, while Mumbai has recorded the country’s sharpest rental appreciation at 15–20% year-on-year.
Anuj Kejriwal, CEO – Retail & CEO – EMEA, ANAROCK Group, says, “On a year-on-year basis, Delhi-NCR’s Grade A+ malls have witnessed a stronger rental appreciation of ~8–12%, outperforming Grade A assets at ~6–8%, indicating a widening gap driven by superior footfalls, tenant productivity, and asset positioning. This trend reinforces the flight-to-quality observed among retailers, with top-tier malls capturing disproportionate demand.”
The NCR retail market has ~19 Mn sq. ft of upcoming supply projected through 2031, reflecting strong developer confidence and continued retailer interest in the region. This pipeline is characterized by a mix of Grade A and emerging Grade A developments, indicating both institutional participation and the evolution of organized retail across micro-markets.
“This surge in demand in the two realty hotspots is essentially powered by aggressive expansion from international retailers and entertainment anchors,” says Kejriwal. “Notable recent transactions include Zara and Levi’s at Pacific Mall (Tagore Garden) and the entry of Foot Locker at DLF Mall of India, Noida. In Mumbai, the Phoenix Palladium and Jio World Drive continue to set benchmarks, with premium monthly mall rents reaching as high as INR 777 per sq. ft.”
“This period of growth is accompanied by a massive structural shift in Indian retail, where Grade A+ assets are significantly outperforming the broader market. The substantial 19 Mn sq. ft. pipeline planned for Delhi NCR by 2031 is a testament to the long-term confidence developers have in the Indian consumer’s appetite for organized retail,” he adds.
Supply-Demand Dynamics & Vacancy Trend (Last 8 Years)
Meanwhile, the MMR retail pipeline is expected to witness a cumulative supply addition of ~4 Mn sq ft between 2026–2031, indicating a steady development trajectory. Supply is phased, with peak additions in 2028 (~1.80 Mn sq ft), followed by 2027 and 2030 (~1.20 Mn sq ft each), while near-term supply in 2026 remains limited (~0.25 Mn sq ft). Post-2030, supply tapers off, reflecting a measured pipeline approach.
Other City Highlights:
Bengaluru: The city remains a resilient mid-range market with 5–8% vacancy and a healthy expansion focus in the East and South corridors, led by anchors like Lifestyle and Westside. The city is poised to witness a decent retail supply pipeline of ~5.03 Mn sq. ft. by 2031. The average mall rental in Bengaluru stands at ~₹200–250 per sq ft (chargeable, vanilla stores) across Grade A/A+, indicating a relatively stable and mid-range rental market compared to other Tier I cities. The market is further supported by healthy occupancy levels, with vacancy rates in Grade A and above malls remaining low at ~5–8%, reflecting strong leasing traction and sustained demand from retailers.
Hyderabad: Emerging as a supply powerhouse, Hyderabad anticipates 7.1 million sq. ft. by 2031. Hyderabad’s Grade A mall ecosystem reflects a moderate rental environment, with the city average for vanilla stores at ~₹200- 250/sq.ft. Asset-level performance indicates a wide dispersion, with top-performing malls achieving ~₹300-400/sq.ft. (↑ ~54% above city average), while underperforming assets remain in the range of ₹168–₹176/sq.ft. (↓ ~25–30%).
Pune: Pune is seeing massive activity with IKEA and Uniqlo driving headline deals. The city’s organized retail market reflects stable rental benchmarks for vanilla stores, with city-level averages indicating a mature yet steadily evolving consumption landscape. As per the analysis, vanilla store rentals in Grade A developments average ~INR 175-225 psf, with asset-level variations ranging from ~INR 170 psf to ~INR 300 psf. This spread highlights the impact of mall positioning, catchment affluence, and brand mix on rental performance, with premium centres commanding significantly higher trading values.
Chennai: Chennai’s organized retail market reflects stable but relatively moderate rental performance, with average vanilla store rentals at ~INR 175–225 psf (chargeable) across select Grade A developments. The limited sample size indicates a concentrated, asset-driven market with minimal variance in rental positioning.
Kolkata: The city’s limited upcoming supply of 1.85 Mn sq. ft. is expected to protect current rental values despite a more conservative leasing pace. While
New Trends Across Cities
As the retail landscape evolves, the focus is shifting toward suburban expansion. In Mumbai, upcoming new retail supply is increasingly concentrated in Thane, Borivali, and Panvel, while Bengaluru sees growth along Sarjapur Road. This trend suggests that while city centres are saturated, the next wave of growth will be driven by residential catchments in peripheral districts.
Further, Indian retail real estate is emerging as one of the most resilient and institutionally attractive asset classes within the commercial real estate landscape. As highlighted in this report, Grade A/A+ retail assets across key metropolitan markets are witnessing historically low vacancy levels of ~0–2%, alongside sustained rental growth of ~6–10% year-on-year in Grade A/A+ assets. This performance is further reinforced by a constrained near-term supply pipeline and strong occupier demand, creating a favourable environment for asset owners and investors alike.
Another key trend shaping the sector is the growing maturity of lease structures, with ~74% of transactions now following hybrid revenue-linked models and nearly ~75% of leases locked in for 3–7-year tenures. And, with a calibrated upcoming supply pipeline, largely concentrated in high-growth suburban micro-markets, the sector presents a strong development opportunity aligned with urban expansion corridors.
Overall, the combination of ~USD 25–30 Bn core investment potential, ~40–50 MSF redevelopment scope, and sustained consumption-led demand is expected to drive increased participation from institutional investors, including REITs, private equity funds, and sovereign wealth capital, positioning retail real estate as a key growth asset class in India through 2030.
