New Delhi, Oct 3 (NationPress) The Indian retail real estate landscape is witnessing a significant shift, with institutional players taking the lead. A recent report highlights that 30-35 percent of the 650 operational malls across India now adhere to institutional standards. This marks a remarkable transition from a fragmented growth model to a more consolidated, quality-driven approach, rarely seen globally.

According to the report, the proportion of Grade A malls has increased from merely 22 percent of the inventory in the top seven cities in 2015 to an anticipated 60 percent by 2027. Concurrently, vacancy rates have plummeted from 19 percent to approximately 9 percent, demonstrating a significant enhancement in both quality and demand, as per the latest findings from Anarock research.

This trend is especially prominent among leading market players who collectively manage 58 malls covering 34 million square feet and have plans for over 45 new malls that will span an additional 42.5 million square feet of prime retail space over the next 3-5 years.

Anuj Kejriwal, CEO and MD of Anarock Retail, noted, “The rapid spread of institutional investment is now reaching beyond metropolitan areas into Tier 2 cities. Regions like Chandigarh, Indore, Surat, Bhubaneshwar, and Coimbatore—home to aspirational populations with increasing purchasing power—are emerging as new hubs for organized retail.”

The evolution of the Indian retail sector is fueled by shifting consumer expectations and the growing preference of global brands for standardized, experiential shopping environments. However, the future growth of malls is also contingent on their attractiveness to private equity and REIT investors.

Despite this swift evolution, India still trails behind developed nations, boasting only 110 million square feet of quality retail space, compared to over 700 million square feet in the US and over 400 million square feet in China, where mall properties are predominantly institutionally owned.

India’s relentless urbanization and impressive retail sales productivity—ranging from Rs 1,200 to 1,600 per square foot monthly in Grade A malls—highlight the enormous potential for growth.

With new mall launches averaging over 1 million square feet, further activity from REITs is anticipated. The industry is gearing up for a future characterized by “bigger, better, and branded” malls, paving the way for a world-class, experience-driven retail environment, as stated in the report.