India’s retail real estate sector is poised for a structural shift, with retail-focused Real Estate Investment Trusts (REITs) emerging as the next big frontier. While the country’s REIT landscape has so far been dominated by office assets, growing investor appetite for income-generating retail properties—spurred by resilient consumption, rising urban incomes, and a maturing mall ecosystem—is setting the stage for expansion.

According to ANAROCK Research, India’s retail REIT market could reach ₹60,000–80,000 crore by 2030, accounting for nearly 30–40% of the overall REIT market, which is projected to touch USD 25 billion (₹2 lakh crore) by the end of the decade. This evolution, analysts say, will mirror trends in mature economies, where retail REITs represent 15–25% of total REIT market capitalization.

Anuj Kejriwal, CEO & MD – ANAROCK Retail, says, “Currently, out of the five listed REITs in India, four are office-focused and only one – Nexus Select Trust – is retail-centric. However, with Grade A malls now maturing into stable, income-generating assets, 2-3 retail REITs are expected to launch over the next 3-5 years. Our estimate of the Indian retail REITs’ potential to become a INR 60,000 – INR 80,000 crore market in the next five years assumes only partial listings of various institutional portfolios.”

This vital new entry into India’s REIT universe will mirror the path of mature economies, where retail REITs form 15% to 25% of total REIT market capitalization.

Hotspots Emerging Beyond the Metros

Tier-II cities such as Indore, Coimbatore, Surat, Bhubaneswar, and Chandigarh are witnessing the entry of institutional players for the first time, with mall developers like Phoenix Mills, Prestige Estates, and Nexus Malls expanding aggressively in 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 new mall space.

Market Demand-Supply Dynamics

According to ANAROCK Retail’s RELEAP H1 2025 report, the first half of the current year saw 2.8 million sq. ft. of mall space deployed across the top 7 cities – 155% more than in 2024, when 1.1 million sq. ft. of supply was recorded. Net absorption in malls was approx. 2.0 Mn sq. ft. – almost 31% more than that in the previous year. The absorption was predominantly driven by the Apparel and F&B segments, which accounted for nearly 55% share of the total absorption.

These absorption trends in institutional assets reflect an evolution in Indian consumer preferences,” says Anuj Kejriwal. “High-value consumption categories are being seen as gaining increasing traction – an important signal to mall developers and their tenant mix strategy going forward.”

High Streets Vs. Malls – A Changing Rental Landscape

“Across major cities, high streets are showing consistent rental appreciation, reflecting sustained demand for prime retail locations with high footfall and visibility characteristics,” says Kejriwal. “In contrast, mall rentals have largely remained stagnant in most cities, indicating a more cautious approach from retailers towards enclosed retail formats amid evolving market dynamics.”

Outlook

The Indian organized mall sector is no longer chasing square footage and focusing on creating vibrant urban destinations instead.

Predictions for the Next 5 Years:

* Top 5 mall owners will control 60% of the overall organized stock

* New retail REITs will institutionalize the market further

* We will see wave of mixed-use redevelopment, with older malls repurposed into integrated lifestyle districts

“Retail is no longer just an afterthought in Indian real estate portfolios,” summarises Kejriwal. “It is now edging closer to centre-stage, under the spotlight as a resilient, high-yield asset class which is finally ready for institutional scale and public markets.”