From Zara to Levi’s: What’s driving surge in Delhi-NCR’s Grade A+ mall rentals?

India’s Grade A/A+ retail real estate market is witnessing a sharp tightening in supply, with top malls in Delhi-NCR and Mumbai nearing full occupancy amid rising demand from global and domestic brands, according to a new report by ANAROCK Group and IMAGES Group.

The report, titled Leasing Trends in Malls Across Top Metropolitan Cities in India, was unveiled at the Phygital Retail Convention in Mumbai on Wednesday.

Vacancy levels near zero in Delhi-NCR; strong rental appreciation in Mumbai

It revealed that vacancy rates in Grade A and A+ malls across Delhi-NCR have dropped to nearly 0–2 per cent, effectively translating into full occupancy in several key retail assets. At the same time, Mumbai Metropolitan Region (MMR) has recorded some of the country’s sharpest rental appreciation, with recent leasing transactions reflecting nearly 15–20 per cent year-on-year (YoY) growth.

The report also highlighted a massive upcoming retail development pipeline, with more than 45 million sq ft of new retail supply expected across India’s top seven cities between 2026 and 2031. Delhi-NCR alone is expected to add nearly 19 million sq ft of retail space during the period, reflecting growing developer confidence and sustained retailer demand.

Mumbai supply outlook and investment opportunity

The Mumbai Metropolitan Region is also expected to see nearly 4 million sq ft of cumulative retail supply between 2026 and 2031, with peak additions projected in 2028.

According to the report, India’s current Grade A retail stock and future pipeline together present an estimated investment opportunity of nearly USD 25–30 billion by 2030. Additionally, around 40–50 million sq ft of ageing Grade B and C malls across major cities could undergo redevelopment, creating another significant opportunity for investors and developers.

Strong performance of Grade A+ assets in Delhi-NCR

Anuj Kejriwal said Delhi-NCR’s Grade A+ malls have outperformed Grade A assets in rental appreciation, registering annual growth of nearly 8–12 per cent, compared to 6–8 per cent in Grade A properties, on a YoY basis.

“This trend reinforces the flight-to-quality observed among retailers, with top-tier malls capturing disproportionate demand,” he said.

From Zara to Levi’s: What’s driving the surge in Grade A+ mall rentals?

The surge in demand is being driven largely by aggressive expansion from international retailers and entertainment brands. Recent leasing transactions include brands such as Zara and Levi's at Pacific Mall, while sportswear giant Foot Locker has entered DLF Mall of India.

In Mumbai, premium malls such as Phoenix Palladium and Jio World Drive continue to command some of the country’s highest rentals, with premium mall rents touching nearly Rs 777 per sq ft per month.

Retail momentum across other major cities

Beyond Delhi-NCR and Mumbai, several other major cities are also witnessing strong retail momentum.

Bengaluru will likely witness almost 5 million sq ft of additional retail supply until 2031, with vacancy ratios staying moderate at 5-8 per cent. The retail segment in the city has been fueled by eastern and southern corridors, with Lifestyle and Westside-like brands expanding rapidly.

Hyderabad is developing into a leading source for retail supplies, with 7.1 million sq ft of future retail spaces anticipated until 2031. The best performing shopping centres in Hyderabad are already attracting almost Rs 300-400 per sq ft as rental prices, well above the average price level in the city.

In contrast, Pune has become a leading market with high activities, driven by the expansion plans of international brands like IKEA and Uniqlo.

Chennai’s organised retail market continues to see stable rental performance, while Kolkata’s limited upcoming supply is expected to help protect existing rental values despite relatively conservative leasing activity.

The report also noted a growing shift toward suburban retail expansion across cities. In Mumbai, upcoming retail projects are increasingly concentrated in Thane, Borivali, and Panvel, while Bengaluru’s growth corridor is moving toward Sarjapur Road.

According to the study, India’s organised retail market is becoming increasingly attractive for institutional investors, including REITs, sovereign wealth funds, and private equity firms. The sector’s appeal is being supported by historically low vacancy levels, rising rentals, hybrid revenue-linked lease models, and long-term lease tenures ranging between three and seven years.

The report also noted that nearly 74 per cent of retail leasing transactions now follow hybrid revenue-linked models, while about 75 per cent of leases are signed for tenures between three and seven years.

Industry experts believe the combination of sustained consumption-led demand, low vacancy levels, strong rental growth, and significant investment and redevelopment opportunities will continue to position retail real estate as a key growth asset class in India through 2030.