India’s retail real estate market is on the brink of a transformative growth phase, with 166 million square feet of new Grade A mall space expected across seven major cities by the end of 2026. Fueled by a persistent demand-supply mismatch and a surge in leasing activity, the upcoming supply will be led by Hyderabad and Delhi-NCR, which will account for 65% of the total. While some experts warn of oversupply risks, industry leaders remain optimistic, pointing to strong absorption rates and rising demand in Tier II and III cities. The expansion reflects broader shifts in consumer behavior, infrastructure, and investment sentiment.
Surge in Mall Development Amid Soaring Demand
India’s top seven metropolitan areas—Delhi-NCR, Hyderabad, Mumbai, Bengaluru, Kolkata, Chennai, and Pune—are poised to witness an unprecedented retail construction boom. According to data from Anarock, a leading real estate consultancy, these cities will add approximately 166 lakh square feet (16.6 million sq ft) of new Grade A mall space by the end of 2026.
The bulk of this growth will be concentrated in Hyderabad and Delhi-NCR, which together are projected to account for nearly two-thirds of the upcoming supply. This aggressive expansion underscores the growing appetite for high-quality retail infrastructure amid a rapidly evolving consumer landscape.
A Persistent Gap Between Demand and Supply
Anarock’s analysis highlights a long-standing gap between new mall supply and leasing activity. In 2022, the seven cities added just 26 lakh sq ft of new space, while leasing demand exceeded 32 lakh sq ft. The trend persisted in 2023, with 53 lakh sq ft supplied against 65 lakh sq ft leased.
However, 2024 marked the most severe shortfall yet, as election-related delays in regulatory approvals caused new mall supply to plummet to just 11 lakh sq ft—while leasing remained at a healthy 65 lakh sq ft. The result: a stark undersupply that has made retail real estate one of the more resilient segments within India's broader property market.
Outlook: Cautious Optimism Amid Supply Surge
While the forthcoming inventory could potentially raise concerns about oversupply, current and projected absorption levels remain robust. Leasing activity over the next two years is expected to exceed 126 lakh sq ft, suggesting that new developments will be met with considerable demand, particularly in high-density urban centers.
“Although the planned influx of supply raises eyebrows, the leasing momentum is reassuring,” said Anuj Kejriwal, CEO and Managing Director of Anarock Retail. He believes the imbalance observed in recent years justifies the scale of upcoming projects.
Rise of Tier II and III Cities in Retail Expansion
Beyond the metros, India’s retail growth story is now making inroads into Tier II and III markets. Cities like Jaipur are emerging as credible retail destinations, backed by rising disposable incomes and a growing appetite for modern shopping experiences.
Abhishek Bansal, Managing Director of Pacific Group, noted that the future of retail lies not only in traditional urban hubs but also in smaller cities that are increasingly integrated into the national consumption economy. Pacific Group currently operates nine malls with over 30 lakh sq ft of retail space spread across Delhi, Ghaziabad, Faridabad, and Dehradun.
City Highlights: Hyderabad, Delhi-NCR, and Bengaluru Lead the Charge
Hyderabad is experiencing a retail renaissance, propelled by strong economic fundamentals and rising consumer confidence. “The rapid expansion of Grade A retail spaces, particularly in Hyderabad, is a clear reflection of the city’s economic strength,” said Kirthi Chilukuri, Managing Director of Stonecraft Group. He further linked retail expansion to a concurrent rise in premium residential demand—a trend observed in integrated urban growth models.
Delhi-NCR is also positioned as a frontrunner, according to Pralayesh Guha, Vice President–Projects at Trehan Iris. Factors such as infrastructure improvements, consumer affluence, and changing lifestyle preferences are driving a renaissance in retail real estate across the capital region.
Bengaluru, too, remains on the radar for both domestic and international brands. Angad Bedi, Chairman and Managing Director of BCD Group, emphasized that India’s retail landscape is undergoing structural changes, with homegrown and foreign brands aggressively expanding to meet evolving consumer needs.
Conclusion: India’s Retail Real Estate Enters a New Growth Cycle
India’s organized retail sector is set to embark on a historic expansion phase, with developers racing to bridge the gap between surging consumer demand and lagging infrastructure. The 166 million sq ft pipeline reflects not only the sector’s growth potential but also the maturing of India’s consumption-driven economy.
As leasing activity remains strong and investor interest grows in Tier II and III markets, the retail real estate sector appears to be on solid footing. While developers must tread carefully to avoid oversupply, current trends suggest that India’s urban and semi-urban retail ecosystems are ripe for long-term, sustainable growth.
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