Commercial real estate investing in India is a popular form of increasing financial earnings, of which retail real estate investments are particularly popular. High street shops and shopping centers/ mall spaces are two of the most common types of retail spaces that can be found in India. Keep reading to understand all about commercial property ROI on high street vs mall spaces in India, including current market trends and rental yields in different cities, so that you can make an informed decision on which type of retail spaces to invest in.
What are High-Street Shops?
High streets are bustling shopping areas located in the central parts of cities and towns. A high density of street-side retail shops for lease and rent can be found in such areas, with a large portion of them being family-owned businesses or local brands. Typically, the size of shops in such streets ranges from tiny street-side carts to small kiosks and mid to large-sized luxury retail shops. Such streets offer an open-air shopping experience and are valued for their old-city charm and availability of local products. By promoting local economies and enhancing public transportation in the local region, they also help uplift the property value of surrounding areas.
What are Mall Spaces?
Shopping centers or malls are large, planned buildings with multiple types of retail spaces. They consist of a diverse mix of retail spaces for rent, including functions like entertainment, shopping, eating and communal activities in a single building. The size of each retail space can vary from small mall kiosk rentals to large anchor shops spread across 2-3 floors. Malls and shopping centres offer multiple benefits such as comfortable air-conditioned spaces, parking facilities and increased accessibility with universal design features. They also allow consumers to access a wide range of different shops in a single building, enhancing the convenience of shopping.
High Street vs Mall Spaces in Retail Real Estate
Retail Space Market Trends
According to a study by IBEF, retail leasing in India reached approximately 6.4 million sq ft in the top eight cities in 2024 and overall retail sector leasing reached a 5-year high of 3.1 million sq ft in the first half of 2024. Since their initial development in the 1990s, the number of shopping malls in India has rapidly increased, going up to more than 350 malls today.
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Meanwhile, the number of high streets has not undergone a major increase. However, many of the existing older markets have been modernised or semi-modernised. According to a Knight Frank research, 44% of older retail streets in India’s top 8 cities have evolved to include modern retail properties for lease and sale.
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By the end of 2023, the total gross leasable area in shopping malls was 92.9 million sq ft, while the gross leasable area in high streets was 5.7 million sq ft (forming just 6% of the total retail commercial real estate area) across the top 8 cities (source).
Type of Retail Shop Space
Of the retail spaces surveyed in a study by Knight Frank, 16815 retail shops were found in 340 mall spaces and 7246 shops in 58 high streets. This means that malls have a high density of shops, even though the average shop size is much larger. High streets typically have small to medium-sized shops.
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Depending on the type of goods sold in a retail space, different typologies can be found in high streets and shopping centres. In both high streets and malls, a higher percentage of apparel and accessories stores, along with small retail spaces for food and beverage, can be observed.
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High streets have a lower number of international brand shops than mall spaces. This suggests that consumers are generally willing to spend more money in malls, while seeking more local products on high streets.
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Commercial Property Rents
According to a report by Anarock, the following values can be observed for high streets and mall spaces for rent in different Tier I cities in India:
| City | High Street | Malls/ Shopping Centres |
| Rent per sq ft per month (₹) | Rent per sq ft per month (₹) | |
| Mumbai | 500 – 700 | 750 – 850 |
| Delhi NCR | 500 – 1000 | 725 – 800 |
| Hyderabad | 160 – 300 | 250 – 400 |
| Bengaluru | 350 – 400 | 500 – 600 |
| Chennai | 200 – 250 | 400 – 500 |
| Pune | 275 – 300 | 450 – 575 |
Therefore, higher rents can be observed in mall spaces compared to high streets. This is due to higher expenditure on operations in mall spaces, including charges for shared amenities like electricity, HVAC systems and maintenance charges.
High Street vs Mall Spaces ROI Comparison
As per a report by Times Property, the rental yield in prominent high streets in metropolitan cities experienced the following annual growth in 2024:
| City | High Streets Annual Rental Yield Growth (%) |
| Mumbai | 9 – 10 |
| Delhi NCR | 3 – 5 |
| Hyderabad | 10 – 25 |
| Bengaluru | 11 – 15 |
| Chennai | 5 -7 |
| Pune | 7 – 8 |
On the other hand, mall spaces across different cities experienced an average rental growth of 29% over the last 5 years (meaning that an average annual growth of around 6% was observed in this period), according to a report by Cushman & Wakefield.
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As per another report by Money Control, ROI on high street shops in Tier I cities is around 10-12%, while 8% ROI can be observed in mall spaces. Therefore, it can be concluded that high-street shops in Tier I Indian cities have a much higher annual growth in rental yields as well as a higher average return on commercial property than mall spaces, even though the rents are lower.
Risk Assessment for Retail Property
- Footfall: High street shops witness a footfall of around 15-40 per day, while mall spaces get a footfall of around 100 per day. However, sales conversions are 3-4 times higher in high streets than in malls, as per a report by Moneycontrol. This, combined with the lower rents in high streets, makes these shops more profitable for retailers.
- Vacancy Rates: As per a report by Times Property, shopping mall spaces for rent in different cities faced the following vacancy rates in 2024:
| City | Shopping Mall Vacancy Rate (%) |
| Mumbai | 7.6 |
| Delhi NCR | 15.6 |
| Hyderabad | 4.4 |
| Bengaluru | 12.6 |
| Chennai | 14.7 |
| Pune | 7.7 |
Meanwhile, high street retail store spaces for lease and rent have an average vacancy rate ranging from 3-7%.
- Operational Expenses: Operational expenses are much higher in mall spaces due to charges for Common Area Maintenance (CAM). These charges are much lower in commercial retail properties on high streets as each shop is independently operated. Shop spaces for rent in malls also have to spend more on advertising, as the store’s visibility among hundreds of other shops is much lower. Meanwhile, most high street shops rely on brand and customer loyalty to ensure higher sales.
- E-Commerce Shifts: Since the Covid pandemic, there has been a growing demand for e-commerce, resulting in lower levels of offline retail consumption in both high streets and mall spaces. However, this shift has affected spaces in malls for rent much more than high street shops. This is because of the presence of more local brands in high streets.
Future Expectations in Retail Real Estate
According to a report by Anarock, the Indian retail market is expected to touch $2 trillion by 2032, growing at nearly 10% CAGR (Compound Annual Growth Rate). A major portion of this is taken up by e-tail or the online retail sector.
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However, both high streets and mall spaces are expected to grow significantly. Although the total revenue potential of mall spaces is expected to be much higher, the average revenue potential of high street shops per unit area is expected to be 3-4 times higher. This means that high street shops are predicted to be 3-4 times more profitable than mall spaces to rent or buy, even in the near future.
Key Insights: High Street vs Mall Spaces
From all the data mentioned in the previous sections, the following conclusions can be drawn:
| High Street Shops | Mall Spaces | |
| Type of Shops | Small to medium-sized shops with a higher presence of local brands. | Small to large-sized shops with a higher presence of international brands. |
| Rental Yield | Lower rents in both tier I and tier II cities, but higher annual growth. | Higher rents in all cities, but lower annual growth. |
| ROI | Average ROI of 10-12% in tier I cities. | Average ROI of 8% in tier I cities. |
| Risks Associated | Low vacancy rates (3-7%) and operational charges, lower footfall but higher sales conversions, and lower negative impact by e-commerce shifts. | Higher vacancy rates (4-16%) and operational charges, higher footfall but lower sales conversions, higher negative impact from e-commerce shifts. |
| Future Outlook | Expected to incorporate more modern retail space for sale and rent, along with mixed-use integrations. Expected to have higher ROI and profitability per unit area. | Vacancy rates are expected to reduce. However, mall spaces are predicted to continue having lower profitability per unit area compared to high street shops. |
Building the Best Commercial Retail Space
Both high street shops and mall spaces have various pros and cons. The commercial rental yield in India also depends on several other factors, like design and location within a particular city. Brick & Bolt, a tech-enabled construction company in India, offers end-to-end construction services for building residential and commercial spaces. With customised designs prepared by expert architects, these spaces maximise efficiency and have the potential to yield high ROI on commercial real estate. To ensure that you get the best designs in retail real estate for your commercial property, get in touch with Brick & Bolt today!
Apoorva H P Achar