Indian retail real estate is expanding beyond the metropolises, with developers targeting tier 2 and tier 3 cities for their next wave of growth. The shift is evident in the strategies of major players who are building mixed-use assets in locations like Udaipur and Faridabad, moving away from simple retail spaces toward integrated ecosystems.
From small spaces to mega-projects
Nandini Taneja, Chief Executive Officer of Bhumika Enterprises, has witnessed this transformation over more than two decades. When she began her career in 2001, a 100,000 square foot building counted as a shopping mall. Today, she plans centres of 2 million square feet. Her career path took her through major property consultancy Cushman & Wakefield, where she helped international brands enter India, and REACH Developers, where she managed suburban Gurgaon assets from construction to stabilization.
Taneja now leads Bhumika Enterprises, the asset arm of Bhumika Realty. The company is expanding Bhumika Urban Square in Udaipur and building Bhumika Icon, a mixed-use development in Faridabad. The goal has shifted from simply filling space to creating assets that perform and deliver returns over the long term. The focus is on the right fit, data-backed positioning, and overall profitability rather than just leasing.
Historically, retail real estate was in a nascent stage, with developers focused on organizing the sector and filling available space with willing retailers. The modern approach requires a more sophisticated understanding of micro markets, consumer profiles, and long-term asset management. This evolution reflects the broader maturation of the Indian real estate market.
Experience over shopping
Visiting a shopping centre is no longer primarily about buying things. Families now come for food, movies, and the experience retailers offer, alongside easier shopping and digital services. If a family only wants to shop, e-commerce provides convenience that physical retail cannot match. To bring people out of their homes, destinations must offer food, cultural events, movie shows, and outdoor screenings.
The economics of a modern mall have shifted significantly. Food and beverage once accounted for just 4–5% of a leasing portfolio, but now averages 22–23%. When entertainment formats like family entertainment centres and cinemas are included, these elements make up nearly half of a retail centre. In this context, shopping becomes incidental to the overall experience.
Developers now ask what unique proposition they can offer that no other development does. Leading family entertainment chains are creating new formats tailored to local demographic needs, such as ice-skating rinks, gaming areas, or amphitheatres for movie screenings. This trend suggests that the future of retail lies in destinations that offer a complete lifestyle package rather than just a place to buy goods.
Despite the rise of e-commerce, physical retail continues to grow. The Indian retail economy is valued at $1.3 trillion and is expected to double by 2030. Consumption in the first half of this year was 10% higher than last year, indicating that shopping in retail centres is expanding rather than contracting. E-commerce complements malls, and brands are increasingly offering the same prices in stores as online. Customers still prefer to touch and feel products before purchasing, particularly in tier 1 and tier 2 cities.
The role of data and tenant mix
Choosing the right brands depends heavily on local demographics and purchasing power. A catchment area usually spans five to seven kilometres. If the residents are cash-rich but prefer mid-level brands, luxury formats may not fit. The tenant mix must reflect these micro market characteristics. Developers study infrastructure growth and population shifts to predict future demand.
Technology aids these decisions through data analysis. Dashboards track trading density, sales per square foot, and consumer movement. Spending patterns reveal preferences for youth-oriented or mature products. When beauty categories grow at 18–20% annually, developers allocate more space to them. The goal is to match the portfolio with the evolving needs of the catchment area.
When a brand underperforms, the process of repositioning begins. Brands may move floors or exit entirely. Management first assesses whether the retailer needs support or if the fit is fundamentally wrong. Repositioning often involves adjusting the tenant mix, updating service areas, or improving circulation. This ongoing effort ensures the asset remains relevant and profitable over time.
Future growth and strategy
Udaipur has attracted national developers due to its growing population and infrastructure. Faridabad represents a new corridor with potential for integrated residential, commercial, and retail assets. The region benefits from improved connectivity and new housing developments.