Grade A mall vacancy across the top 7 cities fell to 5% in H1 2026

Grade A mall vacancy across the top 7 cities fell to 5% in H1 2026, from over 7.5% towards 2025-end, according to Anarock data.

This is the lowest vacancy level in the last five years. In the two largest retail markets MMR and Delhi-NCR, mall vacancy was 4% by the end of H1 2026 and 7% respectively.

Six of the seven cities recorded a further 60 basis point decline in vacancy quarter-on-quarter, suggesting a broad-based tightening trend even as absolute city-level vacancy levels differ sharply. Only Chennai bucked the trend – the city’s vacancy edged marginally higher in Q2 2026 even as its Grade A malls continued to operate at near-full capacity.


“Entertainment and fashion & apparel demand led leasing, followed by food & beverage. Additionally, malls outperformed high streets in overall leasing share in MMR. In terms of rental momentum across micro markets, it was the strongest on Linking Road, which posted India’s sharpest single-corridor rise at 20% year-on-year with monthly per-square-foot rents ranging between Rs 1,000-1,500 - the highest of any micro market in the country,” said Anuj Kejriwal, CEO – Retail & CEO – Europe, Middle East & Africa, ANAROCK Group.

NCR, contrastingly, recorded the highest vacancy among the top 7 cities at 7% in H1 2026, despite being the only city to receive notable new mall supply in Q2 2026. The 0.90 Mn sq ft of new mall space added there effectively accounted for the maximum new completions in all the top cities. Pune was the only other city to see about 0.20 Mn sq ft of new mall space added in Q2 2026.

Despite the supply addition, NCR’s leasing volume of 0.20 Mn sq ft - roughly a third of Mumbai’s - trailed behind other cities, which added zero new supply. In NCR, Gurugram accounted for the largest share of NCR’s leasing, followed by Delhi and Noida, with malls contributing over 60% of quarterly activity and fashion, F&B, and departmental stores leading category-wise absorption.


Of all the top 7 cities, Kolkata has the lowest vacancy at 1.3% - effectively full occupancy - with no new mall supply added, and Grade A malls operating near capacity.

Bengaluru and Hyderabad have similar (4%) vacancy levels as MMR’s despite having different leasing volumes (0.39 and 0.23 Mn sq ft respectively) and different category drivers - Bengaluru led by high-street fashion, accessories, and furniture, and Hyderabad by fashion & apparel alongside food & beverage.

Pune’s 3.5% vacancy - the second lowest of the top 7 cities - came alongside the only other new supply addition (0.20 Mn sq ft) and 0.50 Mn sq ft of leasing in Q2 2026.

Chennai posted 6% vacancy with only 0.06 Mn sq ft leased - the lowest leasing volume of the top cities - concentrated in its peripheral southern micro markets, even as prime high streets like Anna Nagar and Velachery recorded some of the strongest rental growth nationally, at 9% and 8% year-on-year respectively.

“Retailers today are looking to expand their footprint, but in many established markets, the constraint is increasingly the availability of the right retail ecosystem rather than consumer demand. High rentals, limited availability of quality space and intense competition for prime locations can make expansion commercially challenging, particularly for brands looking to build a meaningful presence across multiple catchments,” said Shriram PM Monga, Co-Founder, SRED Global.

Tier-2 cities areare seeing stronger organised Grade A retail infrastructure, rising consumer aspirations and greater demand for national and international brands. Since 2020, Tier-2 cities have added around 5.9 million sq. ft. of Grade-A retail space, significantly expanding the quality of options available to retailers.

“The opportunity in these markets goes beyond lower occupancy costs. Retailers are increasingly looking for locations where they can build long-term consumer relationships, and Tier-2 cities are offering that combination of growing consumption, improving infrastructure and relatively greater availability of quality retail space,” Monga said.