For decades, the narrative of organized commerce in India was confined to the glass-and-steel corridors of a few major metropolitan cities, a trend that seems to be moving to new, emerging urban centres. Cities like Jaipur, Lucknow and Indore are no longer just points on a map for regional trade; they are transforming into high-growth consumption hubs that, in turn, are fundamentally reshaping the country’s Real Estate Investment Trust (REIT) landscape.
Of the five listed REITs in the country, only Nexus Select Trust, backed by Blackstone, is retail-focused; the rest are office REITs such as Embassy, ​​Mindspace, Brookfield, and DLF’s DCCDL. In mature markets like the US, Singapore, and Australia, retail REITs make up 15–25% of total REIT market capitalization, a benchmark India is now approaching.
A report by Anarock Research, ‘Indian Retail REITs: The Next Growth Frontier,’ said that India’s next wave of mall REITs may not come from Mumbai or Delhi, but from fast-emerging Tier-II cities such as Indore, Coimbatore, Surat, Bhubaneswar, and Chandigarh.
The report said that the country’s retail Real Estate Investment Trust market could touch ₹60,000– ₹80,000 crore by 2030, emerging as one of the biggest new investment themes in Indian real estate.
Currently, retail REITs account for only a fraction of India’s ₹1.3 lakh crore REIT market, which is dominated by office assets. But that’s set to change. Anarock projects that retail REITs could make up 30–40% of India’s total REIT market, expected to grow to $25 billion ( ₹2 lakh crore) by 2030.
The shift to ‘premiumisation’
As Tier-1 markets face saturation and land costs rise, developers and REIT managers are looking towards the premiumisation of Tier-2 cities. In these cities, a rising class of affluent consumers is fueling a massive demand for international-grade shopping and entertainment experiences that were once considered the exclusive domain of cities like Mumbai, Delhi, or Bengaluru.
Recent consumer data indicates that as Tier-1 markets face high land costs and limited space, nearly 45 per cent of the new supply pipeline for organized retail is now being directed toward high-growth Tier-2 and Tier-3 centres.
The movement is backed by market intelligence. According to the CBRE India Retail Figures H2 2025 report released in January 2026, India’s retail real estate market saw 8.9 million sq ft of absorption in 2025. While metros still lead in volume, CBRE highlights a ‘decisive shift’ toward quality-led growth, with mall developers and international brands increasingly looking at Tier-2 cities as their next big frontier. For a REIT, this demand validates the asset’s quality and ensures a high-credit-profile tenant base, which is essential for stable, growing dividend payouts.
Operational efficiency and consumption
Retail REITs anchored in these high-growth centers offer a consumption play that is distinct from traditional IT-park-heavy office REITs. While office assets are often influenced by global corporate cycles, retail assets in Tier-2 cities are driven by domestic resilience. Malls in cities like Indore and Lucknow often demonstrate higher operational efficiency than their metro counterparts.
With fewer competing organized centres, these malls achieve higher occupancy rates. CBRE’s research indicates that as retailers emphasize experiential flagship stores and Gen Z-focused formats, these regional hubs are becoming vital assets for active management and long-term financial stability.
Higher rental growth and diversification
For the modern investor, the benefits of this regional expansion are two-fold – potential for higher rental growth and geographical diversification. Tier-1 markets are saturated, and rental escalations are often stable but capped. In emerging centres, on the other hand, the supply-demand mismatch supports more robust rental growth, thereby increasing the cash flow distributed to REIT unitholders.
Furthermore, by including Tier-2 retail assets, a REIT portfolio becomes less vulnerable to localized economic downturns in major hubs. It spreads the risk across multiple growing regional economies.
Looking ahead
The inclusion of regional retail assets in REIT portfolios is a sign of the democratization of India’s urbanization story. Investors no longer need to navigate the complexities of local property laws to own a stake in a premier mall in Rajasthan or Uttar Pradesh. Through the REIT structure, they can participate in the growth of these high-performance assets with the same ease as buying a mutual fund.
As cities like Jaipur, Lucknow and Indore continue to outpace traditional growth benchmarks, they are offering retail investors an opportunity to participate in the growth story of a new, emerging Bharat and make wealth. In this, REITs can offer a transparent, liquid way to profit from the country’s regional consumption surge.
