Mumbai Sees 57% Drop In New Mall Space Supply

A recent report by Anarock has revealed that the fresh supply of retail spaces in shopping malls across seven major cities, including Mumbai, has declined by 57% to 0.9 million sq ft during the January-March period. This decline is attributed to delays in construction activities.

The report highlights that the gross leasing of retail spaces in malls stood at about 4.1 million sq ft in the first half of the year, whereas new completions of retail spaces were limited to just 0.9 million sq ft. The seven major cities included in the report are Mumbai, Delhi-NCR, Bengaluru, Pune, Hyderabad, Chennai, and Kolkata.

Anuj Kejriwal, CEO – Retail & CEO – Europe, Middle East & Africa at Anarock Group, noted that the supply problem is cumulative and escalating. He stated that the data from India's top seven cities over the past 16 years shows a persistent mismatch between Grade A retail supply and leasing demand.

While new mall completions have fluctuated sharply on a year-on-year basis, the leasing demand has steadily absorbed available Grade A space, pushing vacancy rates lower. Kejriwal observed that the biggest challenge for retailers is not drawing shoppers but finding the right spaces to serve them in.

In 2023, the top seven cities added 5.3 million sq ft of new Grade A retail supply against gross leasing of 6.5 million sq ft. During 2024, new supply fell sharply to just 1.1 million sq ft, while leasing stayed at 6.5 million sq ft. In 2025, new supply recovered partially with 5.2 million sq ft of new completions, while leasing surged to a record 13 million sq ft.

The consultant noted that building a successful large-format retail asset is considerably more complex than delivering other forms of real estate. The development of Grade A mall requires a large and contiguous land parcel in a strategically located catchment. The availability of suitable land is itself a constraint in established urban markets, while rising land costs can make new projects difficult to structure.

The vacancy levels have dropped to 6.7% in H1 2026, according to Anarock. This decline in vacancy levels is a testament to the growing demand for retail spaces in malls. The report highlights the need for developers to respond to the growing demand for Grade A retail spaces in malls.

The decline in new mall space supply is expected to have a significant impact on the retail industry in Mumbai and other major cities. Retailers may face challenges in finding suitable spaces to serve their customers, which could lead to increased competition for available spaces.

In conclusion, the report by Anarock highlights the need for developers to address the shortage of Grade A retail spaces in malls. The decline in new mall space supply is a significant concern for the retail industry, and it is essential for developers to respond to the growing demand for retail spaces in malls.

The report also notes that the development of Grade A mall requires careful planning and execution. The availability of suitable land, approval timelines, financing conditions, and construction schedules can all impact the delivery of new mall projects. As the demand for retail spaces in malls continues to grow, it is essential for developers to navigate these challenges and deliver high-quality retail spaces that meet the needs of retailers and customers alike.

Overall, the decline in new mall space supply is a significant trend that is expected to have a lasting impact on the retail industry in Mumbai and other major cities. As the industry continues to evolve, it is essential for developers to respond to the growing demand for Grade A retail spaces in malls and deliver high-quality retail experiences that meet the needs of retailers and customers alike.

The future of the retail industry in Mumbai and other major cities will depend on the ability of developers to address the shortage of Grade A retail spaces in malls. With the demand for retail spaces in malls continuing to grow, it is essential for developers to deliver high-quality retail spaces that meet the needs of retailers and customers alike.