Mumbai: India’s retail sector is witnessing a major transformation, with over 16.6 million square feet of new Grade A mall space expected across top seven cities by 2025 and 2026, according to a new report. This surge is driven by rising consumer demand and strong momentum in retail leasing, marking a golden era for the sector, as reported by Anarock Research.

Hyderabad and Delhi-NCR will lead this supply boom, accounting for nearly 65% of the upcoming mall space, signaling a shift toward high-growth consumption centers in these cities. The expansion is part of a broader retail real estate pipeline, potentially adding over 40 million square feet of new retail space by 2029.

Anuj Kejriwal, CEO and MD of Anarock Retail, noted that the increased mall development stems from a shortage of quality supply in recent years. “In 2022, top cities saw only 2.6 million sq. ft. of new supply, while leasing hit 3.2 million sq. ft.,” Kejriwal stated. “Similarly, in 2023, new supply was 5.3 million sq. ft., but leasing demand remained higher at 6.5 million sq. ft.”

Despite this surge in new space over the next two years, there is no immediate concern of oversupply. An estimated 12.6 million square feet of mall leasing is expected across the top cities in 2025 and 2026.

Over 60 international retail brands have entered India in the last four years, spurring strong demand for high-footfall malls. Mall vacancy rates, peaking at 15.5% in 2021, are expected to stabilize at 8.2% in 2025 and 8.5% in 2026.

Growth is spreading beyond major metros, with Tier 2 and Tier 3 cities becoming retail hotspots due to rising disposable incomes and increasing ecommerce adoption. The number of online shoppers in India is projected to grow from 140 million in 2020 to 300 million by 2030 and 700 million by 2035.