Mumbai, 17 December 2025: As malls in western countries of the world brace for an existential crisis, global capital is pivoting toward a market that seems to defy every global retail trend—India. While the U.S. has witnessed a net closure of nearly 1,200 mall stores since 2020—with rising vacancies forcing almost 40% of empty malls to undergo rezoning or repurposing—India is experiencing a retail resurgence driven by strong consumer demand and growing institutional investor confidence.
Anuj Kejriwal, CEO – Retail Leasing and Industrial & Logistics, ANAROCK Group, says, “Latest ANAROCK data shows that in the next 3 years, Indian malls are set to see over USD 3.5 Bn of capital inflows. Meanwhile, 88+ foreign brands have entered the Indian retail market and are seeking to expand aggressively. Several more global brands are in the pipeline, seeking space in the severely restricted Grade-A assets currently available.”
As a sharp counterpoint to Western countries’ markets, India’s massive unmet demand from a young consumer base and limited organized retail competition, backed by supportive FDI policies, are exactly what foreign brands and investors now seek.
A major confidence driver is the extreme undersupply of quality retail space in the country. India’s per capita retail stock remains one of the lowest in the world—Tier 1 cities operate with just 4 to 6 sq. ft. per person, Tier 2 and 3 cities with 2 to 3 sq. ft., and Grade A mall space alone sits at barely 0.6 sq. ft. per capita. In contrast, the US averages close to 23 sq. ft., while China exceeds 6 sq. ft.
“This gap, combined with India’s per capita income nearly doubling in the last decade, has created a demand–supply mismatch virtually unheard of in global retail,” says Kejriwal. “Grade-A malls are running near-full occupancy, reporting 95-100% occupancy with long waitlists for key zones. Rental growth has consistently surpassed pre-pandemic levels, and developers now find leasing cycles outpacing construction cycles—a rarity anywhere in the world.”
For investors seeking predictable, inflation-hedged cash flows, this imbalance is a compelling long-term opportunity.
Consumption Gravitates to Quality Malls
With its rare combination of demographic demand drivers, India’s consumption story is creating new headlines. The country is on track to become a USD 6 trillion consumption economy by 2030. Unlike their Western counterparts, Indian malls are lifestyle destinations anchored in entertainment, dining, and social experiences. Daily footfalls in major malls routinely exceed 20,000 on weekdays and surge beyond 40,000 on weekends. F&B and entertainment now account for 30–35% of footfalls, resulting in a resilient retail mix almost completely immune to the online retail disruptions that are defeating Western malls.
Sharpened Investor Appetite
India has over 600 operational malls, but less than 100 meet the institutional benchmarks that attract global funds – triggering aggressive competition for top-tier assets.
“With its 19 malls’ portfolio housing 1,000+ brands and generating INR 1,600 Cr in annual NOI, Blackstone’s Nexus Select Trust REIT listing in 2023 kick-started retail-led REITs in India,” adds Kejriwal. “It established the sector’s credentials as a transparent, scalable, and professionally managed asset class. By 2030, at least two more retail REITs are expected to enter the Indian market.”
E-commerce Not a Spoilsport
Among the most attractive dynamics for global investors is that Indian malls have not capitulated to e-commerce—they are, in fact, benefiting from it. India’s e-commerce penetration remains around 8%, far below the 20%-plus levels seen in China and the US. Brands here are increasingly going ‘phygital,’ with offline stores now experiencing and trust-building centers while online platforms drive scale.
Many leading D2C brands report that offline conversions are 2-3 times higher than online. In India, physical retail has retained its relevance in a digital age.
Peerless Value Proposition for Global Investors
Indian Grade-A malls typically deliver 14-18% IRRs, almost twice the yields seen in many Western markets. Rental escalation cycles, consumption growth-linked revenue-sharing arrangements, and consistently low vacancies signal stability and upside for global capital seeking both yield and long-term growth.
“This renders India unique among the world’s leading retail markets,” Kejriwal sums up. “In the US and Europe, malls are contending with oversupply, declining footfalls, online cannibalization—and the looming specter of repurposing into other formats. In contrast, the Indian retail market has limited quality supply, rising incomes, heavy footfalls, and rapid brand expansion. In the first half of 2025, retail leasing in India rose almost 70% Y-o-Y, and new mall supply grew by over 160%.”
