Highlights
- India to attract over USD 3.5 billion in retail investments in three years
- Over 88 foreign brands entered India between 2021 and 9M 2025
- Grade-A malls in India operate at near-full occupancy
- US malls see net closures despite new store openings
- Indian retail assets offer nearly double the returns of Western markets
As shopping malls in Western countries face an existential crisis, global investors are increasingly shifting their focus to India, a market that continues to defy global retail slowdown trends. While the United States has recorded nearly 1,200 net mall store closures since 2020, India is witnessing a strong revival in organized retail, backed by rising consumption, limited supply, and sustained foreign interest.
In the US, despite a 78 per cent increase in new mall store openings over the past two years, vacancies remain high. Nearly 40 per cent of empty malls are being rezoned or repurposed, highlighting structural challenges such as oversupply, declining footfalls, and the growing dominance of e-commerce. Europe faces similar pressures, with many malls struggling to stay relevant.
India presents a stark contrast. According to ANAROCK Research, the country’s retail sector is expected to attract more than USD 3.5 billion in capital inflows over the next three years.
Anuj Kejriwal, CEO – Retail Leasing and Industrial & Logistics at ANAROCK Group, said, “Latest ANAROCK data shows that in the next 3 years, Indian malls are set to see over $3.5 billion 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.”
One of the biggest drivers of this momentum is India’s severe undersupply of quality retail space. Per capita retail stock in Tier I cities stands at just 4 to 6 square feet, while Tier II and III cities have only 2 to 3 square feet. Grade-A mall space is barely 0.6 square feet per person. In comparison, the US averages nearly 23 square feet per capita, and China exceeds 6 square feet.
“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 per cent 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.”
India’s consumption story further strengthens investor confidence. The country is on track to become a USD 6 trillion consumption economy by 2030, driven by a young population, rising incomes, and rapid urbanization. Indian malls function as lifestyle destinations, with entertainment, food, and beverage accounting for 30–35 per cent of footfalls. Weekday footfalls often cross 20,000 and exceed 40,000 on weekends, making malls resilient to online retail disruption.
Investor appetite is also rising due to the success of retail-focused REITs. “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,” Kejriwal adds. “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.”
Unlike Western markets, e-commerce has not weakened Indian malls. With online penetration at just 8 per cent, brands are adopting a ‘phygital’ strategy, using physical stores to build trust and drive higher conversions.
Indian Grade-A malls typically deliver internal rates of return between 14 per cent and 18 per cent, nearly double the yields seen in many Western markets.
As Kejriwal concludes, “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.”
