India’s retail infrastructure is set to undergo a significant transformation, with Anarock Property Consultants reporting that 16.6 million square feet (sq. ft.) of new shopping mall space is expected to come up across seven major cities by the end of 2026. This development signals a robust rebound in the retail real estate sector, which has witnessed a growing mismatch between demand and supply over the last few years.

The primary cities leading this retail expansion include Hyderabad, Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, and Pune. According to Anarock, 65% of this new supply will be concentrated in Hyderabad and the Delhi-National Capital Region (NCR)—two regions that have experienced a dramatic upswing in consumer activity and urban lifestyle evolution.

Retail Space Gap Fueling Expansion

According to Mr. Anuj Kejriwal, Chief Executive Officer & Managing Director of Anarock, the top seven cities in India have long struggled with a shortage of Grade A mall spaces, despite robust leasing trends. This supply-demand imbalance has been a defining feature of the retail market since 2022:

• In 2022, around 2.6 million sq. ft. of new retail space was added, while 3.2 million sq. ft. was leased.

• In 2023, supply increased to 5.3 million sq. ft., but leasing surged to 6.5 million sq. ft..

• The gap became more glaring in 2024, with only 1.1 million sq. ft. of new space entering the market, yet leasing remained strong at 6.5 million sq. ft..

These figures clearly illustrate that leasing activity has consistently outpaced the availability of new Grade A retail space, making the case for developers to invest in mall development across urban centers.

2025–2026: The Great Retail Buildout

In response to this mismatch, developers and real estate stakeholders have accelerated their retail expansion strategies, aiming to deliver 16.6 million sq. ft. of shopping mall space in just two years. This new supply is expected to be well-aligned with actual leasing demand, particularly in prime retail corridors of cities like Hyderabad and Delhi-NCR, which are expected to see the bulk of upcoming projects.

The Delhi-NCR region, due to its size, affluence, and consumer diversity, continues to be a hotbed for retail activity. Simultaneously, Hyderabad, once considered a secondary player in retail real estate, is emerging as a key market, thanks to rising disposable incomes, IT sector growth, and infrastructure development.

Tier II and III Cities Join the Retail Boom

While the focus remains on India’s top metros, Anarock’s data suggests that tier II and III cities are beginning to witness rapid expansion in mall infrastructure. Cities like Jaipur, Lucknow, Coimbatore, and Indore are attracting interest from national and regional developers, primarily due to:

• Untapped consumer markets

• Improved urban connectivity

• Higher penetration of organized retail

• Rising aspirations among middle-class households

These cities are expected to play a crucial role in the next wave of retail growth, especially as brands seek to expand their footprints beyond saturated metropolitan regions.

Consumer Demand Driving Infrastructure

The evolving lifestyle patterns of Indian consumers are a central force behind the retail sector’s resurgence. The demand for experiential shopping, entertainment zones, food courts, and lifestyle destinations is prompting developers to rethink mall design and functionality.

Malls today are no longer just shopping venues—they are community spaces, family destinations, and urban social hubs. With increasing urbanization, changing consumer preferences, and rising retail consumption, the demand for high-quality retail infrastructure is likely to remain strong through 2026 and beyond.

Leasing Forecast and Developer Confidence

Despite past concerns over oversupply, Anarock forecasts over 12.6 million sq. ft. of retail leasing across the top seven cities over the next two years. This estimate reassures developers that upcoming mall projects will likely find ample takers among national and international retail chains, food & beverage operators, fashion brands, and entertainment providers.

As of now, leasing activity is expected to be especially strong in Hyderabad, Delhi-NCR, and Bengaluru, followed by Chennai, Mumbai, Pune, and Kolkata. The diversification of retail offerings, from luxury outlets to value-based shopping, ensures that various consumer segments are catered to.

Key Trends Shaping the Future of Indian Retail Malls

1. Mixed-Use Developments: New malls are increasingly integrated with office spaces, residences, and hospitality, making them part of larger urban ecosystems.

2. Tech-Enabled Experiences: From smart parking to AI-based navigation systems and AR/VR shopping trials, malls are investing in technology to improve customer experiences.

3. Sustainability Focus: Developers are keen on constructing green buildings, using energy-efficient materials, and incorporating waste management systems to meet ESG (Environmental, Social, and Governance) criteria.

4. Flex Spaces: As consumer behaviors evolve, retailers are seeking flexible store formats—including pop-ups, co-retailing, and event-based rentals.

5. Entertainment-First Designs: Malls are becoming more experience-driven, with an increasing number of multiplexes, gaming zones, indoor amusement parks, and cultural spaces.

Conclusion

India’s retail sector is witnessing a structural transformation, driven by rising demand, urban aspirations, and an increasingly vibrant consumer base. With 16.6 million sq. ft. of Grade A shopping mall space set to be added in seven major cities by 2026, the landscape is being redefined to align with modern retailing trends. The expansion also extends into tier II and III cities, signaling a broad-based shift in retail infrastructure development across the country.

Anarock’s insights reinforce that the retail boom is not just a passing trend but a significant evolution in India’s real estate market. With developers optimistic, brands ready to expand, and consumers demanding better experiences, India’s shopping malls are poised for a golden era in the coming years.

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