India’s Grade A and Grade A+ retail real estate market is witnessing an unprecedented tightening in supply, with premium destination malls across Delhi-NCR and the Mumbai Metropolitan Region (MMR) nearing full occupancy levels, according to a new report by ANAROCK.
The report, titled Leasing Trends in Malls Across Top Metropolitan Cities in India, noted that vacancy rates in key retail assets across Delhi-NCR have declined sharply to between 0 and 2%, while Mumbai recorded the country’s steepest rental appreciation at 15–20% year-on-year.
Delhi-NCR is expected to see nearly 19 million sq.ft. of new retail supply by 2031, signalling strong developer confidence and sustained retailer interest in the market. The upcoming supply pipeline comprises a mix of Grade A and emerging Grade A developments, reflecting growing institutional participation and the continued expansion of organised retail across multiple micro-markets.
The sharp increase in demand across Delhi-NCR and Mumbai was being driven by aggressive expansion from international retailers and entertainment anchors. Recent leasing transactions involved brands such as Zara and Levi’s at Pacific Mall, along with the entry of Foot Locker at DLF Mall of India.
The sector’s current growth phase reflected a broader structural shift in Indian retail, with Grade A+ assets increasingly outperforming the wider market. The substantial upcoming supply pipeline in Delhi-NCR underscored developers’ long-term confidence in the Indian consumer’s appetite for organised retail.
In the Mumbai Metropolitan Region (MMR), the retail pipeline is projected to add around 4 million sq.ft. of new supply between 2026 and 2031. The report stated that supply additions would be phased, with the highest additions expected in 2028 at approximately 1.8 million sq.ft., followed by 2027 and 2030 with around 1.2 million sq.ft. each. Near-term supply in 2026 is expected to remain limited at roughly 0.25 million sq.ft., while post-2030 supply is projected to taper off, indicating a measured development strategy.
Among other metropolitan markets, Bengaluru continued to emerge as a resilient mid-range retail market, maintaining vacancy levels between 5% and 8%. The city is expected to witness a retail supply addition of around 5.03 million sq.ft. by 2031, with expansion concentrated in the eastern and southern corridors. Retail growth in these micro-markets is being supported by anchor brands such as Lifestyle and Westside.
The report stated that average mall rentals in Bengaluru currently range between Rs. 200 (US $2.09) and Rs. 250 (US $2.61) per sq.ft. for vanilla stores across Grade A and Grade A+ assets, reflecting a relatively stable rental environment compared with other Tier-1 cities.
Hyderabad, meanwhile, is emerging as a major retail supply hub, with approximately 7.1 million sq.ft. of retail space expected to be added by 2031. Average rentals for vanilla stores in Grade A malls range between Rs. 200 (US $2.09) and Rs. 250 (US $2.61) per sq.ft., although premium malls in the city are achieving significantly higher rentals of Rs. 300–400 (US $3.14–US $4.18) per sq.ft.
Pune also recorded heightened leasing activity, driven by retailers such as Uniqlo. According to the report, vanilla store rentals in Pune’s Grade A malls average between Rs. 175 (US $1.83) and Rs. 225 (US $2.35) per sq.ft., with premium retail destinations commanding rentals of up to Rs. 300 (US $3.14) per sq.ft. depending on catchment demographics and brand mix.
The report further noted that India’s retail expansion story is increasingly shifting towards suburban and peripheral markets. In Mumbai, upcoming retail supply is concentrated in locations such as Thane, Borivali, and Panvel, while Bengaluru’s growth is increasingly centred around the Sarjapur Road corridor. The findings suggest that while traditional city-centre retail markets are nearing saturation, the next phase of growth is expected to be driven by residential catchments in peripheral districts.
