Global Funds Target Indian Malls Amid US Retail Stagnation
Mumbai, Wednesday, 17 December 2025.
With US malls facing 1,200 closures since 2020, investors are pivoting to India, where Grade-A retail assets offer nearly double the returns of Western markets and vacancy rates near zero.
Diverging Trajectories in Global Real Estate
A profound decoupling is underway in the global retail real estate sector. While the United States has recorded nearly 1,200 net mall store closures since 2020, institutional capital is aggressively pivoting toward India, where the sector is poised to attract over $3.5 billion in investments over the next three years [1]. This capital rotation is driven by a stark contrast in asset performance; Indian retail assets are currently yielding returns that are nearly double those found in Western markets, supported by Grade-A mall occupancy rates hovering between 95% and 100% [1]. This operational resilience stands in sharp relief to the saturation observed in developed economies, prompting global asset managers to reallocate funds to capture India’s consumption upside.
The Grade-A Scarcity Premium
In India, the investment thesis is predicated on a severe supply constraint relative to booming demand. Anuj Kejriwal of the ANAROCK Group describes the current market dynamic as a “demand–supply mismatch virtually unheard of in global retail,” fueled by a scarcity of Grade-A assets [1]. This shortage is acute; India’s per-capita retail space remains significantly lower than the US average of approximately 2.1 square meters and China’s 0.56 square meters [1]. Consequently, premium malls in India are delivering internal rates of return (IRR) between 14% and 18%, significantly outperforming their Western counterparts [1].
Expanding Investment Vehicles
The appetite for Indian retail exposure is evolving beyond direct asset acquisition into more structured financial products. Following the 2023 listing of Blackstone’s Nexus Select Trust REIT—which stabilized the market by generating INR 1,600 Cr in annual Net Operating Income across 19 malls—the sector is maturing rapidly [1]. Industry projections indicate that at least two additional retail REITs are expected to enter the market by 2030, providing institutional investors with liquid avenues to access this growth story [1]. This financialization of real estate assets is critical for absorbing the projected capital inflows.