The revival is being driven by strong consumer demand, favourable demographics and growing confidence among institutional investors., the report reveals. Representational pic
As shopping malls across western economies grapple with falling footfalls and rising closures, India is emerging as a bright spot on the global retail investment map. Indian shopping malls are expected to attract more than USD 3.5 billion in capital inflows over the next three years, according to data from ANAROCK Research & Advisory.
While the United States (US) has seen a net closure of nearly 1,200 mall stores since 2020, with rising vacancies forcing close to 40 per cent of empty malls to be rezoned or repurposed, India's retail sector is witnessing a sharp resurgence. The revival is being driven by strong consumer demand, favourable demographics and growing confidence among institutional investors.
Anuj Kejriwal, the chief executive officer of retail leasing and industrial & logistics at ANAROCK Group, said Indian retail continues to defy global trends.
"Latest ANAROCK data shows that in the next three years, Indian malls are set to see over USD 3.5 billion of capital inflows. Meanwhile, over 88 foreign brands have entered the Indian retail market and are seeking to expand aggressively. Several more global brands are in the pipeline, scouting for space in the severely restricted Grade-A assets currently available," he said.
Between 2021 and the first nine months of 2025, more than 88 international brands entered India's retail market. Many of them are actively seeking space in Grade-A malls, which remain in acute short supply across major cities.
India's per capita retail stock remains among the lowest globally. Tier-I cities offer only 4-6 sq ft of retail space per person, while Tier-II and Tier-III cities have just 2-3 sq ft per capita. Grade-A mall space stands at barely 0.6 sq ft per person, compared to nearly 23 sq ft in the US and over 6 sq ft in China.
"This gap, combined with India's per capita income nearly doubling over the last decade, has created a demand-supply mismatch virtually unheard of in global retail," Kejriwal said. "Grade-A malls are operating at near-full occupancy, with 95-100 per cent leased space and long waitlists in key zones. Leasing cycles are now outpacing construction cycles, which is extremely rare globally."
Consumption-led growth story
India is projected to become a USD 6 trillion consumption economy by 2030, powered by a young population, rising disposable incomes and rapid urbanisation.
Unlike their western counterparts, Indian malls function as lifestyle and social destinations, anchored by entertainment, dining and experiential offerings.
Daily footfalls at large Indian malls often exceed 20,000 on weekdays and cross 40,000 on weekends. Food and beverage outlets and entertainment zones account for 30-35 per cent of total footfalls, making Indian malls relatively resilient to online retail disruptions.
Strong investor appetite
Despite having over 600 operational malls, fewer than 100 in India qualify as institutional-grade assets, intensifying competition for high-quality retail properties.
Kejriwal said Blackstone's Nexus Select Trust REIT listing in 2023 marked a significant milestone for retail-led real estate investment trusts in India. The REIT includes 19 malls housing more than 1,000 brands and generates around Rs 1,600 crore in annual net operating income.
"By 2030, at least two more retail REITs are expected to enter the Indian market," he said.
'E-commerce not a threat'
Unlike in western markets, e-commerce has not weakened physical retail in India. With online retail penetration at around 8 per cent - far lower than in the US and China - brands are increasingly adopting a âphygital' approach, combining physical stores for experience and trust with digital platforms for scale.
Several direct-to-consumer brands report offline conversion rates that are two to three times higher than online sales, underscoring the continued relevance of brick-and-mortar retail.
High returns attract global capital
Indian Grade-A retail assets typically offer internal rates of return (IRRs) of 14-18 per cent, nearly double the yields seen in many western markets. Rental escalations, revenue-sharing models linked to consumption growth and consistently low vacancy levels continue to draw global investors.
"In contrast to the US and Europe, where malls are battling oversupply and declining footfalls, India offers limited quality supply, rising incomes and expanding brand presence," Kejriwal said. "In the first half of 2025, retail leasing in India grew nearly 70 per cent year-on-year, while new mall supply rose by over 160 per cent."
