Hyderabad and Delhi NCR to Add 16.6 Million Sq Ft of Malls by 2026

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India’s Mall Space Set to Grow by 16.6 Million Sq Ft by 2026

By 2026, India’s top seven cities will see a major boost in shopping mall space, adding around 16.6 million square feet of new Grade A retail developments, according to a report by ANAROCK Research.

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Hyderabad and Delhi-NCR will lead this growth, contributing nearly 65% of the total new mall space expected in 2025 and 2026. These two cities are becoming key retail hubs, as developers respond to rising demand.

Over the past few years, the demand for retail space has outpaced supply. In 2022, only 2.6 million sq ft of new malls opened, but 3.2 million sq ft were leased. This gap widened in 2023, with 6.5 million sq ft leased against only 5.3 million sq ft of new supply.

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In 2024, mall construction slowed further. Just 1.1 million sq ft of new space was added, largely due to delays in regulatory approvals during the election season. However, leasing activity remained strong, again reaching 6.5 million sq ft.

Anuj Kejriwal, CEO of ANAROCK Retail, explained that developers are now acting to meet the shortage of modern retail spaces. “The next two years will bring supply closer to demand, especially in cities with strong consumer activity,” he noted.

Despite some concerns about too much new space, ANAROCK expects that more than 12.6 million sq ft will be absorbed by retailers across major cities by the end of 2026. Vacancy rates, which hit 15.5% in 2021, are projected to drop to around 8.2% in 2025 and 8.5% in 2026.

This retail boom is being fueled by the arrival of over 60 global brands in India since 2021. These include names in fashion, electronics, lifestyle, and food and beverage, all looking for space in high-traffic malls.

The retail surge isn’t limited to metro cities. Many Tier 2 and Tier 3 cities are becoming strong consumption centers, thanks to rising incomes and better internet access. In FY24, these smaller cities made up 56% of India’s online retail transactions. That number could grow to 64% by 2030.

The number of online shoppers in India has jumped from 140 million in 2020 to nearly 260 million in 2024. Projections show this could reach 300 million by 2030 and an impressive 700 million by 2035.

As developers shift focus to fast-growing urban areas, the balance between supply and demand will play a key role in shaping the future of India’s retail leasing and vacancy trends.

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