India's Mall Renaissance: Grade A Assets Poised to Surge by 60%
The Indian retail real estate sector is witnessing a significant transformation, with Grade A malls projected to rise from 22% to 60% of the inventory in the top seven cities by 2027, driven by institutional investments.
Retail Real EstateGrade A MallsInstitutional InvestmentUrbanizationRetail GrowthReal EstateOct 03, 2025
Grade A malls have risen from just 22% of the inventory in the top seven cities in 2015 to a projected 60% by 2027. Meanwhile, vacancies have reduced from 19% to about 9%—a dramatic sign of improving quality and demand, according to the latest report by Anarock Research.
This trend is most visible among top players, which collectively own 58 malls spanning 34 million square feet and have over 45 new malls, totaling 42.5 million square feet of prime retail space, in the pipeline for the next 3-5 years. Anuj Kejriwal, CEO and MD of Anarock Retail, noted, “It is notable how quickly institutional investment is spreading beyond the metros into Tier 2 hubs. Chandigarh, Indore, Surat, Bhubaneshwar, and Coimbatore, with highly aspirational populations and increasing purchasing power, are the new growth centers for organized retail.”
The Indian retail industry is driven by changing consumer expectations and the preference of global brands for standardized and experiential spaces. However, growth also hinges on institutional investments, which means that mall assets must appeal to private equity and REIT investors.
Despite its rapid transformation, India still lags behind developed economies in terms of quality retail stock. The country has only 110 million square feet of quality retail space, compared to 700+ million square feet in the US and 400+ million square feet in China, where mall assets are almost exclusively institutionally owned.
However, India’s unrelenting urbanization and consistently high retail sales productivity—Rs 1,200–1,600 per square foot per month in Grade A malls—underscore the massive upside potential. With new mall launches averaging over 1 million square feet, further REIT activity is expected. The strong move towards 'bigger, better, branded' malls indicates that India’s retail real estate landscape is preparing for a world-class, experience-driven future, the report stated.
This transformation is not just about numbers but also about the quality of the retail experience. As more institutional players enter the market, the focus is shifting towards creating malls that offer a blend of shopping, dining, and entertainment, catering to the evolving needs of consumers. This holistic approach is expected to drive further growth and attract more international brands to the Indian market.
The Indian retail sector's future looks promising, with the potential to become a significant contributor to the country's economic growth. The sector's ability to adapt and innovate, coupled with the increasing institutional investment, is setting the stage for a new era of retail in India.
Frequently Asked Questions
What percentage of Indian malls are now considered institutional grade?
30-35% of the 650 operational malls across India now meet institutional grade standards.
How has the vacancy rate in Grade A malls changed over the years?
The vacancy rate in Grade A malls has reduced from 19% to about 9%, indicating a significant improvement in demand and quality.
Which Tier 2 cities are emerging as new growth centers for organized retail?
Chandigarh, Indore, Surat, Bhubaneshwar, and Coimbatore are emerging as new growth centers for organized retail due to their highly aspirational populations and increasing purchasing power.
What is the current retail sales productivity in Grade A malls in India?
The retail sales productivity in Grade A malls in India is Rs 1,200–1,600 per square foot per month.
What is the projected percentage of Grade A malls in the top seven cities by 2027?
Grade A malls are projected to rise to 60% of the inventory in the top seven cities by 2027.
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