Scarcity meets surge: Why India’s top malls are getting pricier, busier

This counterintuitive trend, where scarcity drives prices but demand accelerates, reveals how premium retail space has become a strategic asset in India’s consumption boom
| Photo Credit:
ipopba

India’s Grade-A malls are witnessing approximately 20 per cent rental surge over the last two years, yet tenant demand remains at record highs, signalling a fundamental shift in retail real estate dynamics.

The rush is not limited to domestic players. Global retailers are also competing for a foothold in top properties.

This counterintuitive trend, where scarcity drives prices but demand accelerates, reveals how premium retail space has become a strategic asset in India’s consumption boom.

Operators such as Nexus Select Trust are targeting around 50 per cent international tenancy across their portfolio. “There’s a clear gap between demand and supply of good Grade-A malls,” said Pratik Dantara, Chief Investor Relations Officer and Head of Strategy, Nexus Select Trust.

“In our malls, we’ve seen re-leasing spreads of close to 20 per cent over the last five years, and the same trend continues this year. Our average rental stands at about ₹136 per sq ft per month, and if we were to re-lease today, we could command about 20 per cent higher rates,” he added.

Dantara added that Nexus Select Trust maintains an international brand mix of 46 per cent and expects it to stabilise near the 50 per cent mark as the company continues to optimise its portfolio.

In Bengaluru, the rates have been up by approximately 5 per cent year-on-year (y-o-y), said Rahul Phukan, Country Business Development Leader at Decathlon India. “Landlords have become less flexible, but we continue to prioritise locations that deliver consistent footfalls and long-term brand equity,” he said. Rising occupancy costs, he added, have reinforced Decathlon’s focus on efficiency and omnichannel integration rather than downsizing stores.

Sunil Munshi, Senior Vice President – Retail, Brigade Group, said that rental values have appreciated 15–20 per cent in two years, driven by discretionary spending and a shift toward experiential formats. “Cities like Bengaluru, with limited supply of quality space, enable Grade-A malls offering robust brand mixes to command premium rents,” he said.

Brigade’s Orion Gateway, for instance, has added marquee names such as Uniqlo and Lego, both making their South India debut this year.

Fashion remains the largest leasing segment, accounting for about 50 per cent of total uptake, followed by entertainment (20 per cent) and food & beverage (20–30 per cent).

According to Kamakshi Mantri, Chief Strategy Officer, Mantri Square Mall, “We are operating at nearly 98 per cent trading occupancy, with new retail hubs such as Whitefield, Sarjapur Road, and Hebbal catching up fast.”

Even as rents rise, India’s Grade-A malls are proving that scarcity can coexist with soaring demand.

Published on November 11, 2025