India’s Top Cities to Add 16.6 Million Sq Ft of Mall Space by 2026

India’s Retail Real Estate Enters a New Era

A retail renaissance is sweeping across India’s urban landscape. By the end of 2026, the nation’s top seven cities are set to welcome over 16.6 million square feet of new Grade A mall space, according to a recent ANAROCK Research report. This surge is led by Hyderabad and Delhi NCR, which together will account for nearly 65% of the new supply, highlighting their emergence as retail powerhouses.

The Numbers Behind the Boom

The momentum in mall construction comes amid robust consumer demand and strong leasing activity. ANAROCK projects that mall leasing will surpass 12.6 million sq ft across the top cities over the next two years. In stark contrast, only 1.1 million sq ft of new supply was added in 2024, due to regulatory delays, while leasing soared to 6.5 million sq ft, underscoring a persistent supply crunch.

Vacancy rates, which peaked at 15.5% in 2021, are expected to stabilize at 8.2% in 2025 and 8.5% in 2026, reflecting a narrowing gap between supply and demand. As Anuj Kejriwal, CEO & MD of ANAROCK Retail, notes, "The supply demand mismatch in recent years is now balancing out."

Global Brands and New Consumption Hubs

More than 60 international brands, from sectors like fashion, electronics, lifestyle, and F&B, have entered India in the past four years, fueling demand for organized, high footfall retail spaces such as malls and premium high streets. The expansion is not limited to metros; Tier 2 and 3 cities are emerging as vibrant consumption hubs, driven by rising disposable incomes and rapid digital adoption.

E Commerce and the Digital Consumer

E commerce penetration in Tier 2 and 3 cities has now surpassed Tier 1, accounting for 56% of total online shopping in FY24 and projected to reach 64% by FY30. India’s online shopper base has grown from 140 million in 2020 to 260 million in 2024, with forecasts of 700 million by 2035, illustrating the country’s expanding retail consumption landscape.

Looking Ahead

This construction spree is not speculative; it’s a response to real demand and years of undersupply. As developers race to meet the appetite for modern retail, India’s urban centers are poised for a transformation that will redefine shopping and lifestyle experiences for millions.