For decades, the narrative of organized commerce in India has been confined to the glass and steel corridors of a few major metropolitan cities, a trend that appears to be shifting to new emerging urban centers. Cities like Jaipur, Lucknow and Indore are no longer just points on the map for regional trade; they are transforming into high-growth centers of consumption, which in turn are fundamentally reshaping the country’s real estate investment trust (REIT) landscape.
Of the country’s five listed REITs, only Blackstone-backed Nexus Select Trust is retail-focused; the rest are office REITs such as Embassy, Mindspace, Brookfield and DCCDL DLF. In developed markets such as the US, Singapore and Australia, retail REITs account for 15-25% of the total REIT market capitalization, which India is now closing in on.
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Anarock Research’s report “Indian Retail REITs: The Next Growth Frontier” says that the next wave of Indian mall REITs may not come from Mumbai or Delhi, but from fast-growing tier-II cities like Indore, Coimbatore, Surat, Bhubaneswar and Chandigarh.
The report said the country’s retail real estate investment trust market could be affected ₹60,000– ₹80,000 crore by 2030, emerging as one of the biggest new investment themes in Indian real estate.
Currently, retail REITs represent only a fraction of India’s ₹1.3,000 crore REIT market dominated by office assets. But that is about to change. Anarock projects that retail REITs could account for 30-40% of the total Indian REIT market, expected to grow to $25 billion ( ₹2 lakh crore) by 2030.
Move to “Premium”
As Tier-1 markets face saturation and land costs rise, developers and REIT managers are targeting the premium tier of Tier-2 cities. In these cities, a growing class of affluent consumers is fueling massive demand for international shopping and entertainment experiences that were once considered the exclusive domain of cities like Mumbai, Delhi or Bengaluru.
Recent consumer data suggests that Tier-1 markets face high land costs and limited space, and as a result, nearly 45 percent of the new supply pipeline for organized retail is now directed to high-growth Tier-2 and Tier-3 centers.
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The movement is supported by market intelligence. According to the CBRE India Retail Figures H2 2025 report released in January 2026, India’s retail real estate market saw an absorption of 8.9 million square feet in 2025. While the metro continues to lead in terms of volume, CBRE highlights a “decisive shift” towards quality-led growth, with mall developers and international brands increasingly eyeing their next bigger level. For REITs, this demand confirms the quality of the asset and ensures the highly creditable tenant base necessary for stable and growing dividend payments.
Operational efficiency and consumption
Retail REITs anchored in these high-growth centers offer a consumption play that differs from traditional IT-park-heavy office REITs. While office assets are often affected by global business cycles, retail assets in Tier-2 cities are driven by domestic resilience. Malls in cities like Indore and Lucknow often show higher operational efficiency than their metro counterparts.
With fewer competing organized malls, these malls achieve higher occupancy rates. CBRE research shows that retailers are emphasizing experiential flagship stores and formats aimed at Gen Z, making these regional centers vital assets for active management and long-term financial stability.
Higher rent growth and diversification
For the modern investor, the benefits of this regional expansion are twofold – the potential for higher rental growth and geographic diversification. Tier-1 markets are saturated and rent escalation is often steady but limited. On the other hand, in emerging centers, the mismatch between supply and demand supports more robust rent growth, increasing the cash flow distributed to REIT shareholders.
Additionally, by including Tier-2 retail assets, the REIT portfolio becomes less vulnerable to local economic downturns in major centers. Spreads 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 intricacies of local real estate 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-performing assets as easily as buying a mutual fund.
As cities like Jaipur, Lucknow and Indore continue to outperform traditional growth benchmarks, they offer retail investors an opportunity to participate in the growth story of the new emerging Bharat and get rich. In this, REITs can offer a transparent, liquid way to profit from the growth of regional consumption in the country.
