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Building Malls Now Needs Deeper Pockets as Construction Costs Rose 13.9%

  • by- Zaid
  • Apr 17, 2026
Construction costs for malls have risen a record 13.9% over the past two years, driven by upgraded facade designs, addition of multiple basement levels, and costlier mechanical, electrical and plumbing expenses, according to Savills India.
Building Malls Now Needs Deeper Pockets as Construction Costs Rose 13.9%

New Delhi, April 17: The luxury housing segment followed with a 12.8% increase , while mid-market residential projects saw an 11.9% rise as developers invested in improved amenities.

Segment-Wise Construction Cost Increase (2-Year)

Segment Increase
Malls 13.9%
Luxury housing 12.8%
Mid-market residential 11.9%
Affordable residential 11.1%
Commercial office 7.0%
Hospitality 6.5%
Grade-A warehousing 5.8%
General manufacturing            3.8%

Market Outlook

India's construction market, valued at $685 billion in 2025 , is projected to grow to $1.2 trillion by 2034 at a CAGR of 6.9% , according to IMARC Group.

Expert View

Arvind Nandan, Managing Director, Research and Consulting at Savills India, said: "As development activity accelerates across office, residential, retail, and industrial and logistics sectors, construction cost dynamics are becoming increasingly strategic. Input volatility and execution challenges are prompting developers to prioritise efficiency, sustainability and robust planning as key differentiators in driving long-term value."