India’s retail real estate sector is on the cusp of a major transformation as malls, shopping centres, and mixed-use developments emerge as the next growth drivers in the country’s Reit ecosystem. While office assets currently dominate the market, rising urban incomes, steady consumer spending, and consolidation of quality retail properties are fueling interest in retail-focused REITs.
Data from Anarock Research estimates the Indian retail REIT market could grow to between Rs 60,000 and Rs 80,000 Crore by 2030, representing roughly 30-40 per cent of the country’s overall Reit market, which is projected to reach USD 25 billion (Rs 2 lakh crore) by the same year. Currently, only Nexus Select Trust is retail-focused among the five listed Reits, while the remaining four are office-centric. Anarock predicts that 2-3 new retail Reits could launch in the next three to five years as Grade A malls mature into stable, income-generating assets.
Tier-II Cities and New Retail Formats Fuel Growth
Cities such as Indore, Coimbatore, Surat, Bhubaneswar, and Chandigarh are witnessing institutional entry for the first time. Developers like Phoenix Mills, Prestige Estates, and Nexus Malls are aggressively expanding into these high-income, consumption-driven clusters. New projects averaging 1-1.2 million sq. ft. are being planned, with entertainment, F&B, and lifestyle retail accounting for nearly half of the new mall space.
According to Anarock Retail’s Releap H1 2025 report, 2.8 million sq. ft. of mall space was deployed across seven major cities in H1 2025—155 per cent more than the 1.1 million sq. ft. in 2024. Net absorption reached 2 million sq. ft., up 31 per cent from last year, led by apparel and F&B segments.
Changing Retail Landscape
High streets continue to see consistent rental appreciation, while mall rentals remain largely stagnant, reflecting cautious retailer sentiment toward enclosed retail formats. The sector is increasingly focusing on creating vibrant urban destinations rather than merely expanding square footage.
Leading mall operators are consolidating market share. Nexus Malls, backed by Blackstone, operates 19 malls across 14 cities and plans to double its retail footprint in the next three to four years. Phoenix Mills manages 12 malls covering 11 million sq. ft., while DLF, K Raheja, Pacific, and Lakeshore focus on regional dominance.
“Retail is no longer an afterthought in Indian real estate portfolios. It is now edging closer to centre-stage, emerging as a high-yield, resilient asset class ready for institutional scale,” said Anuj Kejriwal, CEO & MD – Anarock Retail. |
