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India’s retail real estate sector is on the verge of a significant transformation. While the country’s Real Estate Investment Trust (REIT) ecosystem has largely been dominated by office assets, retail malls, shopping centres, and mixed-use developments are emerging as the next big growth area. Consolidation of quality retail assets, steady consumer spending, and rising urban incomes are driving this shift, creating opportunities for investors and developers alike.
According to ANAROCK Research, the Indian retail REIT market has the potential to reach between Rs. 60,000 and Rs. 80,000 crore by 2030. This would represent roughly 30–40% of India’s overall REIT market, which is projected to touch USD 25 billion (Rs. 2 lakh crore) by the same year. For context, in mature global markets, retail REITs account for approximately 15–25% of total REIT market capitalization.
Currently, India has five listed REITs, of which four are office-focused, while only one - Nexus Select Trust is dedicated to retail assets. With Grade A malls maturing into stable, income-generating properties, ANAROCK expects two to three new retail REITs to launch over the next three to five years, further institutionalizing the market.
Anuj Kejriwal, CEO & MD of ANAROCK Retail, explains, “Our estimate of the Indian retail REITs’ potential assumes partial listings of various institutional portfolios. Retail is now evolving from being a secondary segment to becoming a core, high-yield component of real estate investment portfolios.”
Emerging Retail Hotspots Beyond Metros
While India’s top metro cities have long been the focus of institutional retail investments, tier-II cities are increasingly attracting attention. Cities such as Indore, Coimbatore, Surat, Bhubaneswar, and Chandigarh are witnessing the entry of institutional investors for the first time. Mall developers like Phoenix Mills, Prestige Estates, and Nexus Malls are expanding aggressively in these high-income, consumption-driven markets.
New projects in these cities are averaging 1–1.2 million square feet, with entertainment, F&B, and lifestyle retail now accounting for nearly half of new mall spaces. This indicates a shift in focus toward creating vibrant urban destinations rather than merely increasing square footage.
Market Dynamics: Supply and Absorption Trends
The Indian retail real estate market has seen robust absorption in recent years. According to ANAROCK Retail’s RELEAP H1 2025 report, the first half of 2025 saw 2.8 million sq. ft. of mall space deployed across the top seven cities, a 155% increase compared to 1.1 million sq. ft. in 2024. Net absorption in malls was around 2 million sq. ft., nearly 31% higher than the previous year.
The absorption was primarily driven by Apparel and F&B segments, which together accounted for about 55% of total leasing. Kejriwal notes, “These trends reflect evolving consumer preferences. High-value consumption categories are gaining increasing traction, which will influence mall developers and tenant mix strategies going forward.”
High Streets vs. Malls
Rental trends in India’s retail landscape are also evolving. Prime high street locations in major cities continue to see consistent rental appreciation, reflecting strong demand for areas with high footfall and visibility. In contrast, mall rentals have largely remained stagnant, indicating a cautious approach from retailers toward enclosed retail formats amid changing consumer behaviour.
This dynamic is prompting developers to rethink their strategies. Retail spaces are no longer just about square footage; the focus is shifting to creating experiential destinations that combine shopping, entertainment, and lifestyle offerings.
The Road Ahead: Predictions for Retail REITs
Looking forward, several key trends are likely to shape India’s retail REIT landscape:
- Top five mall owners controlling 60% of organized stock – leading players will continue to consolidate prime retail assets.
- Launch of new retail REITs – additional institutional listings will further strengthen the market and attract global investors.
- Mixed-use redevelopment – older malls are likely to be repurposed into integrated lifestyle districts, combining retail, entertainment, and F&B to create vibrant urban destinations.
Kejriwal summarises, “Retail is no longer just an afterthought in Indian real estate portfolios. It is edging closer to the centre-stage, emerging as a resilient, high-yield asset class ready for institutional scale and public markets.”
India’s retail REIT sector is poised for strong growth over the next decade. With rising urban incomes, consolidation of high-quality retail assets, and increased institutional participation, retail properties are set to become a core component of India’s REIT ecosystem. The combination of expanding tier-II city markets, evolving consumer preferences, and maturing Grade A malls provides a compelling case for investors and developers alike. By 2030, retail REITs could represent up to 40% of India’s REIT market, cementing their role as a major driver of the country’s commercial real estate growth.
