India’s premium retail real estate market is witnessing a sharp tightening in supply, with Grade A and A+ malls in Delhi-NCR operating at near-full occupancy and Mumbai recording the country’s steepest rental growth of 20 per cent, according to a new report by ANAROCK and Images Group.
The report, titled Leasing Trends in Malls Across Top Metropolitan Cities in India, said vacancy rates in Delhi-NCR’s top malls have fallen to just 0–2%, effectively translating into fully occupied prime retail assets. At the same time, Mumbai’s leading malls have seen rentals rise 15–20% year-on-year amid aggressive expansion by international brands and entertainment-led retail demand.
According to the report, Delhi-NCR’s Grade A+ malls are outperforming even Grade A assets in rental appreciation. Grade A+ malls recorded annual rental growth of 8–12%, compared to 6–8% for Grade A properties, highlighting what ANAROCK described as a widening “flight-to-quality” trend among retailers.
“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,” said Anuj Kejriwal, CEO – Retail & CEO – EMEA, ANAROCK Group.
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,” said 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 Rs 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 added.
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).
The report estimates the current investment opportunity in India’s Grade A retail sector at nearly $25–30 billion, driven by existing institutional-grade assets as well as new developments expected to mature by 2030. Simultaneously, ANAROCK identified a major redevelopment opportunity spanning 40–50 million sq ft of underperforming Grade B and Grade C malls across major cities.
Among other major markets, Bengaluru continues to maintain healthy occupancy levels with vacancy rates of 5–8% and a planned retail pipeline of more than 5 million sq ft by 2031.
Hyderabad is emerging as a major supply hub with over 7 million sq ft expected by 2031, while Pune is witnessing strong leasing momentum led by brands such as IKEA and Uniqlo.
Another major trend identified in the report is the increasing use of hybrid revenue-linked lease structures, which now account for nearly 74% of transactions. Nearly 75% of leases are also locked in for 3–7-year tenures, reflecting rising confidence among retailers and landlords alike.