Premiumisation wave sweeps India's malls and high streets, fuels demand for Grade A+ spaces

Premiumisation Wave: Navigating growth in India's malls and high-street retail

India's retail real estate is witnessing a structural shift towards premiumisation, fuelled by consumers with higher aspirations and greater disposable income, alongside evolving strategies from both brands and developers.

This confluence of factors is giving rise to a more refined, luxury and experience focused retail landscape across the nation, thereby increasing the demand for premium Grade A+ malls and high streets.

Jatin Goel, Executive Director, Omaxe Group, said that top-tier malls and high-street projects are leading this fundamental shift in retail space.

Also Read: Hyderabad, Delhi-NCR to dominate new mall supply as Tier-I cities look set to add more retail spaces

"Driven by the premiumisation wave, the existing and forthcoming retail destinations are quickly embracing this shift, attracting both retailers and consumers in large numbers. For developers to effectively capitalise on this premiumisation wave, key elements such as a well-curated product selection, understanding consumer demand, strategic location, adaptable zoning, brand mix, and exceptional mall management will be critical in times to come," he said.

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Ashish Mishra

Prinicipal Correspondent|moneycontrol

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Rising supply

According to a Cushman and Wakefield report titled 'Premiumisation of India's Retail Sector – Upscaling, Upgrading and Evolving', approximately 12.3 million square feet (msf) of new Grade A and Grade A+ mall supply is expected over the next two years across top 8 cities, which include Delhi NCR, Hyderabad, Mumbai Metropolitan Region, Bengaluru, Chennai, Kolkata, Pune and Ahmedabad.

Out of 12.3 msf mall supply, over 70 percent (8.6 msf) will be of superior grade (Grade A+). The superior-grade malls are typically owned and operated by reputed developers or institutional investors and are characterised by their high occupancy rates (more than 85 percent), upscale tenant mix, and service-rich environments.

Also Read: House Full: Malls defy cooling demand, vacancy drops to 7.8% in 2024

India's total Grade A mall stock stood at 61.5 msf in 2024, with superior grade malls comprising 63 percent (38.9 msf) of it.

The report highlighted that the premiumisation of Indian retail is one of the primary reasons why brands are increasingly preferring Grade A+ malls over other properties. These superior-grade malls have been enjoying healthier occupancy rates, or a super tight vacancy rate of 3-4 percent on average for the last few years.

Premiumisation across high streets

The Cushman & Wakefield report also observed that due to limited space availability in superior-grade malls, many brands have chosen to locate their stores in prominent high streets across the top 8 cities over the last few years. Prominent high streets include locations such as the Linking Road in Mumbai, Khan Market and Connaught Place in Delhi, and MG Road in Bengaluru, among others.

Ishaan Singh, Director, AIPL, said that with the premiumisation wave sweeping across retail high streets and malls, it is essential to understand the specific needs and aspirations of different premium consumer segments.

Also Read: Delhi’s Khan Market remains India’s most expensive retail high-street, 22nd globally

"In our developments, we are placing a strong emphasis on fine dining experiences, curated entertainment zones, and hosting weekend experiential events designed for families. These elements not only elevate the overall visitor experience but also drive higher footfalls and longer dwell times," he added.

Mitul Jain, MD, SPJ Group, concurred, saying that there is a binding need to come up with innovative methods such as brand mix, tailor-made products, experience driven retail destinations to tap the premiumisation benefit, especially in high-density areas.

"Discerning this, we are coming up with a high-street retail project in the heart of Gurugram at Sector 14, a high-density area that lacks organised retail. It makes it highly relevant for us to fill the void and provide this region with this Grade-A premium high-street retail project," he said.

Harinder Singh Hora, Founder Chairman, Reach Group, said that as the Indian retail market is expected to cross $1.6 trillion by 2030, the focus is shifting towards modern retail formats like premium malls and high-street destinations, with organised retail occupying more than 35 percent of it.

"Today’s consumers are seeking more than just shopping—they want immersive environments that bring together global and domestic brands, engaging experiences, and a sense of community. Equally crucial is the integration of sustainable and environmentally responsible practices—from energy-efficient infrastructure to waste management and green building certifications," he said.