India’s retail sector is defying global trends, attracting unprecedented investor interest while Western malls grapple with closures and repurposing. According to ANAROCK Group, Indian malls are set to receive over USD 3.5 billion in capital inflows over the next three years, driven by strong consumer demand, rising incomes, and extreme undersupply of quality retail space.
Since 2021, more than 88 foreign brands have entered India, with many more scouting for Grade‑A mall space. Existing premium malls are operating at 95–100% occupancy, with long waitlists for prime zones. In contrast, the U.S. has recorded nearly 1,200 net mall store closures since 2020, despite new openings, underscoring the divergence between India’s growth story and Western decline.
India’s per capita retail stock remains among the lowest globally — just 4–6 sq. ft. per person in Tier I cities and 0.6 sq. ft. of Grade‑A mall space per capita, compared to 23 sq. ft. in the U.S. and over 6 sq. ft. in China. This scarcity, combined with India’s consumption economy projected to hit USD 6 trillion by 2030, has created a demand–supply mismatch virtually unheard of in global retail.
“Malls here are lifestyle destinations anchored in entertainment, dining, and social experiences,” said Anuj Kejriwal, CEO – Retail Leasing and Industrial & Logistics, ANAROCK Group. “Rental growth has surpassed pre‑pandemic levels, and leasing cycles now outpace construction cycles — a rarity anywhere in the world.”
India currently has over 600 operational malls, but fewer than 100 meet institutional benchmarks. Blackstone’s Nexus Select Trust REIT, listed in 2023, established retail REITs as a scalable asset class, with at least two more expected by 2030.
Unlike Western markets, Indian malls are benefiting from e‑commerce rather than competing with it. With penetration at just 8%, brands are adopting ‘phygital’ strategies — using offline stores for trust‑building and online platforms for scale. Offline conversions are reported to be 2–3 times higher than online, reinforcing the resilience of physical retail.
For global investors, India’s Grade‑A malls deliver 14–18% IRRs, nearly double yields in many Western markets. With rising footfalls, rapid brand expansion, and consistently low vacancies, India’s retail boom offers a peerless value proposition in the global investment landscape.
