Crisil forecasts steady revenue momentum as new assets, higher occupancy and improving retail consumption lift performance across major malls
Indian mall operators are expected to post revenue growth of 12–14 per cent this fiscal year, after a 14 per cent rise in the previous year, supported by new acquisitions, planned capacity additions and routine rental escalations, ratings agency Crisil said.
Crisil expects the momentum to continue into the next fiscal as macroeconomic factors boost discretionary spending. Lower GST rates, steady economic expansion, benign inflation, softer interest rates and an above-normal southwest monsoon are likely to lift consumption, especially revenue-sharing income, which accounts for 10–15 per cent of operators’ earnings.
Occupancy levels have improved, rising 350 basis points to 93.5 per cent last fiscal, and are expected to remain at 94–95 per cent over the next two years as developers fill space in malls launched or acquired recently, the agency said.
An analysis of 35 Grade-A malls across 11 tier 1 and 2 cities, covering 25 million sq ft of retail space, shows that both organic expansion and acquisitions have been key growth drivers for large developers and listed REITs.
“Assets added via organic and inorganic routes have been a growth driver for large mall developers and REITs. Mall operators in our sample set have increased their retail space by 3.0 million square feet in two fiscals through 2025, mainly in tier 2 cities, as part of their growth and diversification strategies,” said Gautam Shahi, Director, Crisil Ratings.
He said an additional 4.5–5.0 million square feet is likely to be added over this fiscal and the next, which could boost annual revenue growth by about 400 basis points.
Retail consumption at malls rose to 7 per cent in the first half of FY26 from 4 per cent a year earlier, helped by lower lending rates, income-tax relief and favourable monsoon conditions. Categories such as apparel, footwear, consumer durables and food and beverages, which together account for nearly two-thirds of leased space and rental income, have seen the strongest gains.
“Debt levels are expected to rise this and next fiscal, primarily to fund ongoing expansions, and planned asset and stake acquisition. Despite this, leverage will remain in check, supported by a healthy operating performance. The debt-to-Ebitda ratio is expected to remain stable around 3.0 times for the current and next fiscal, compared with 2.9 times last fiscal,” said Snehil Shukla, Associate Director, Crisil Ratings.
While the reduction in GST will have a limited direct impact on developers’ finances, higher occupancy and improved rental realisations are expected to support medium-term revenue growth, Crisil said. Rental mark-to-market adjustments have already pushed up realisations by 500 basis points this fiscal.
Operating margins are projected to remain around 70 per cent, in line with recent years, though analysts warn that large, debt-funded acquisitions will require close monitoring.
