Mall mania: ANAROCK Research says Delhi, Hyderabad and 5 more metro cities to see shopping mall boom till 2026 – Industry News

Metro cities are set to see a mall boom. About 16.6 million square feet of grade A mall space is scheduled to be completed in the top 7 metropolitan cities in India in 2025 and 2026, says a report by ANAROCK Research. About 65 percent of this mall space is going to come from Delhi NCR and Hyderabad. 

New mall supply growing exponentially 

The report shows that the new grade A mall space supply is growing exponentially in the metro cities. In 2020,  while the grade A mall leasing space was 6.5 million square feet, the new grade A mall space was only 1.1 million square feet. In the following years, 2022 and 2023, the new grade A mall space supply grew to 2.6 million square feet and 5.3 million square feet, respectively. 

The supply and demand gap concern

With the exponential growth in the new mall space, there are concerns about oversupply and an increase in the supply and demand gap. The ANAROCK Research report indicates that despite the supply growth, the demand gap will increase minimally as organised retail spaces are also going to increase. 

According to the report, in 2021, the vacancy rates in the mall space were close to 15 percent, which came down to 9 percent in 2023. The vacancy rate further narrowed down to 8 percent in 2024. 

In the next 2 years, 2025 and 2026, the vacancy rate is going to increase by 8.2 and 8.5 percent, says the report. 

Anul Kejriwal, CEO and MD, ANAROCK Retail, pointed out that the “strong leasing rate is prompted by the entry of over 60 international retail brands in India over the last four years across categories like fashion, electronics, lifestyle, and food and beverages.” He added that the influx of brands has accelerated demand for high-grade organized retail spaces, particularly in high-footfall zones like malls and high streets.

While the new space for malls is being created in the metro cities, there are also apprehensions about the effect of e-commerce on the footfalls in the malls, ultimately affecting the real estate business. 

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