Sunday, 4 October 2026
India’s shopping-centre market is moving into a new stage of development as larger portfolios, professional management and listed ownership reshape a sector that was historically dominated by individual developers and stand-alone malls. The emergence of Nexus Select Trust has already established retail as a viable REIT asset class. The next phase will depend on whether India’s growing stock of high-quality malls can support additional listed portfolios.
The potential pool of assets is substantial. Knight Frank has identified more than 134 million sq ft of organised shopping-centre stock across 32 Indian cities. Nexus Select Trust, by comparison, currently owns around 10.7 million sq ft of retail space across 19 centres in 15 cities. This means listed retail REIT ownership still represents only a relatively small portion of India’s wider shopping-centre market.
However, total floor space provides only part of the picture. The quality gap between India’s strongest and weakest malls remains significant. Knight Frank has identified around 15.5 million sq ft of underperforming shopping-centre stock, while the best Grade-A properties continue to attract retailers and consumers. Across the eight largest cities, Grade-A mall vacancy declined to approximately 5% in the first half of 2026, alongside around 4.35 million sq ft of retail leasing.
This performance divide is encouraging consolidation. Larger developers and institutional owners can combine several malls into portfolios, establish relationships with national and international retailers across multiple locations and spread operating risk between different cities. Portfolio ownership can also support more consistent management, marketing and asset improvement than is possible across fragmented individual properties.
The development pipeline could increase the amount of investment-grade stock available. Around 12.7 million sq ft of new mall supply is expected between 2026 and 2028 across India’s major urban markets. New projects are also increasingly being combined with hospitality, offices, residential property, entertainment and food and beverage uses. These developments are creating larger destinations where retail forms part of a broader mixed-use environment rather than operating as an isolated shopping facility.
India’s regional cities are becoming an important part of this transition. Around 36 million sq ft of the country’s measured organised shopping-centre stock is located in Tier-II markets. Nexus Select Trust already demonstrates how this can work at portfolio level, with assets in cities including Chandigarh, Indore, Bhubaneswar, Amritsar and Udaipur alongside properties in India’s largest metropolitan markets. A future retail REIT therefore does not necessarily need to depend exclusively on Mumbai, Delhi, Bengaluru or Hyderabad.
For developers, REITs can also become a mechanism for recycling capital. A developer can build or acquire shopping centres, increase occupancy and establish stable rental income before eventually placing mature assets into a listed vehicle. Capital released through that process can then support further development or acquisitions. This model is more realistic than using REITs to finance unfinished or distressed shopping centres, since listed vehicles are generally better suited to established income-producing properties.
Further retail REIT listings are already being anticipated. ANAROCK expects another two or three retail-focused REITs to emerge over the coming years and estimates that the segment could reach ₹60,000–80,000 crore by 2030. This remains a market forecast rather than a certainty, but the possibility is supported by continued consolidation and the increasing scale of institutional mall portfolios.
The main challenge will be producing enough assets that meet institutional expectations. Strong occupancy, reliable rental income, established catchment areas, professional management and a diversified tenant base will determine whether a mall is suitable for a large investment portfolio. India’s substantial stock of weaker shopping centres demonstrates that simply owning retail floor space does not automatically create a REIT-quality asset.
India’s retail property market is therefore moving towards a clearer division between institutional-grade shopping centres and assets requiring repositioning. Nexus Select Trust has demonstrated that a nationally diversified retail REIT can operate successfully in the Indian market. If other owners can assemble sufficiently large and stable portfolios, retail could become a much more important part of India’s listed real estate sector over the remainder of the decade.
Source: © CIJ.World India Research & Analysis Team
