Retail Renaissance: India's Top Cities to Witness Record Mall Development by 2026

A massive upsurge in retail real estate development is set to unfold across India’s top seven cities, as per a fresh ANAROCK Research report. Over 16.6 million square feet of Grade A mall space is expected to be added by the end of 2026, marking a strong resurgence in organized retail development post-pandemic.

Hyderabad and Delhi-NCR to Lead the Pack

The report highlighted that Hyderabad and Delhi-NCR will account for nearly 65% of this upcoming supply, positioning them as the frontrunners in India's new retail wave. These cities are witnessing renewed developer and investor interest, driven by favorable demographics, consumption patterns, and leasing activity.

2025 to 2026: Superior Grade Malls on the Rise

More than 70% of the 12.3 million square feet of new mall supply in 2025 and 2026 is expected to be classified as Superior Grade (A+), indicating a trend toward premium, high-footfall retail environments with better tenant mixes and experiential formats.

Mall Leasing and Vacancy Trends Reflect Market Stability

ANAROCK projects that leasing activity across top cities will exceed 12.6 million sq. ft. in the next two years. Notably, while new supply was subdued in 2024—adding only 1.1 million sq. ft.—leasing still reached 6.5 million sq. ft., suggesting robust retailer demand. Vacancy rates, which peaked at 15.5% in 2021, are expected to settle at more sustainable levels—8.2% in 2025 and 8.5% in 2026.

Retail Momentum Backed by Global Brand Influx

In the past four years, over 60 international brands across fashion, electronics, F&B, and lifestyle segments have entered the Indian market. This influx is intensifying demand for quality retail infrastructure in malls and curated high streets, accelerating organized retail expansion.

Tier 2 and 3 Cities: India’s Emerging Retail Engines

The report further emphasized the rise of Tier 2 and 3 cities as high-potential consumption zones. Increased disposable incomes and digital penetration are transforming these cities into retail-ready hotspots. In fact, e-commerce adoption in these areas has overtaken Tier 1 cities, contributing to approximately 56% of all online shopping in FY24—a number that could climb to 64% by FY30.

India’s Online Shopper Base Witnesses Massive Growth

The country’s online shopper base grew from 140 million in 2020 to 260 million in 2024, with projections reaching 700 million by 2035. This explosive digital consumer base is expected to further support omni-channel retail strategies, strengthening the case for large-format retail spaces across urban and semi-urban India.

News Disclaimer: This article is a rewritten news report based on publicly available information. It is intended for general informational purposes only and does not constitute investment, real estate, or financial advice. Readers are advised to independently verify the data and consult professionals before making any property-related decisions.