MUMBAI: India’s retail real estate market has started the year on a steady note as sustained occupier demand and a limited supply of institutional-grade malls pushed retailers towards high streets and alternative retail formats
Gross leasing across the top seven cities touched 3.1 million sq ft during the January-March quarter. While retail leasing activity moderated 15% sequentially, volumes were still marginally higher by 1% year-on-year, showed data from JLL India.
Also Read: India’s retail hits three-year high with realty leasing growth in 2025
The performance reflected continued resilience in retailer expansion plans despite supply-side constraints. The overall mall vacancy rate declined 40 basis points to 11.9% from 12.3% in the previous quarter as demand continued to outpace available supply.
The quarterly moderation in leasing was largely attributed to the absence of sizeable new mall supply after the addition of 2.5 million sq ft of institutional-grade mall space in the previous quarter. Only 0.25 million sq ft of fresh mall supply entered the market during the quarter, taking the total retail stock across the top seven cities to 92.4 million sq ft.
“India’s retail sector is navigating a pivotal transition with remarkable agility. First quarter’s 3.1 million sq. ft leasing, anchored by a 48% high street surge and domestic retailers commanding 79% market share, reflects strategic format diversification as supply constraints drive innovation,” said Rahul Arora, Head - Office Leasing & Retail Services, Senior MD (Karnataka, Kerala), India, JLL.
He added that vacancy compression, strong international retailer growth and a substantial upcoming supply pipeline indicate structural strength in the sector.
The constrained supply environment significantly altered leasing patterns during the quarter, with high streets emerging as the dominant retail format, accounting for 48% of total leasing activity. Shopping malls followed with a 40% share.
Mumbai led retail leasing activity with a 26% share of the overall absorption, followed by Bengaluru and Delhi NCR at 21% each. Together, the three cities accounted for 68% of total leasing volumes during the quarter.
He added that vacancy compression, strong international retailer growth and a substantial upcoming supply pipeline indicate structural strength in the sector.
Fashion & Apparel continued to dominate retailer categories during the quarter, while the Entertainment segment emerged as the second-largest contributor with a 16% share of leasing activity. Cinema operators accounted for 71% of entertainment-led space absorption as multiplex chains expanded next-generation theatre formats. Food & Beverage followed closely with a 15% share of total leasing.
Domestic retailers continued to anchor demand with a 79% share of leasing activity, while direct-to-consumer brands maintained a steady 7% contribution as digital-first retailers expanded offline presence.
International retailers also accelerated expansion, recording 48% year-on-year leasing growth amid rising confidence in India’s consumption-driven growth story.
According to the data, India’s retail sector is set for a long-term expansion cycle, supported by a development pipeline of 46.1 million sq ft scheduled for delivery between 2026 and 2030 across the top seven cities.
The upcoming supply is expected to help accommodate growing retailer demand, support rental growth and attract higher institutional investment into organised retail real estate.
Gross leasing across the top seven cities touched 3.1 million sq ft during the January-March quarter. While retail leasing activity moderated 15% sequentially, volumes were still marginally higher by 1% year-on-year, showed data from JLL India.
Also Read: India’s retail hits three-year high with realty leasing growth in 2025
The performance reflected continued resilience in retailer expansion plans despite supply-side constraints. The overall mall vacancy rate declined 40 basis points to 11.9% from 12.3% in the previous quarter as demand continued to outpace available supply.
The quarterly moderation in leasing was largely attributed to the absence of sizeable new mall supply after the addition of 2.5 million sq ft of institutional-grade mall space in the previous quarter. Only 0.25 million sq ft of fresh mall supply entered the market during the quarter, taking the total retail stock across the top seven cities to 92.4 million sq ft.
“India’s retail sector is navigating a pivotal transition with remarkable agility. First quarter’s 3.1 million sq. ft leasing, anchored by a 48% high street surge and domestic retailers commanding 79% market share, reflects strategic format diversification as supply constraints drive innovation,” said Rahul Arora, Head - Office Leasing & Retail Services, Senior MD (Karnataka, Kerala), India, JLL.
He added that vacancy compression, strong international retailer growth and a substantial upcoming supply pipeline indicate structural strength in the sector.
The constrained supply environment significantly altered leasing patterns during the quarter, with high streets emerging as the dominant retail format, accounting for 48% of total leasing activity. Shopping malls followed with a 40% share.
Mumbai led retail leasing activity with a 26% share of the overall absorption, followed by Bengaluru and Delhi NCR at 21% each. Together, the three cities accounted for 68% of total leasing volumes during the quarter.
He added that vacancy compression, strong international retailer growth and a substantial upcoming supply pipeline indicate structural strength in the sector.
Fashion & Apparel continued to dominate retailer categories during the quarter, while the Entertainment segment emerged as the second-largest contributor with a 16% share of leasing activity. Cinema operators accounted for 71% of entertainment-led space absorption as multiplex chains expanded next-generation theatre formats. Food & Beverage followed closely with a 15% share of total leasing.
Domestic retailers continued to anchor demand with a 79% share of leasing activity, while direct-to-consumer brands maintained a steady 7% contribution as digital-first retailers expanded offline presence.
International retailers also accelerated expansion, recording 48% year-on-year leasing growth amid rising confidence in India’s consumption-driven growth story.
According to the data, India’s retail sector is set for a long-term expansion cycle, supported by a development pipeline of 46.1 million sq ft scheduled for delivery between 2026 and 2030 across the top seven cities.
The upcoming supply is expected to help accommodate growing retailer demand, support rental growth and attract higher institutional investment into organised retail real estate.
