India’s retail real estate market is preparing itself for a big ramp-up in 2025, as more than 9 million sq.ft. of high-end retail space is planned across 23 new projects, according to a report by JLL India. The move comes after a tough 2024, when fresh supply dived deeply by 73 per cent YoY to a mere 1.7 million sq.ft., despite strong retailer demand.
Gross leasing activity held steady at 8.1 million sq.ft.—just 6 per cent below the previous year—fueled by robust expansion in major metro areas such as, Delhi NCR, Bengaluru and Mumbai. International retailers made a prominent impact, with 27 new foreign brands opening their first stores in the Indian market, principally in the wellness and beauty segment. Malls, especially in Mumbai and Delhi NCR emerged to be the first choice for these international players.
Local retailers continued to have a leading grip, accounting for 80 percent of overall leasing activity. Direct-to-Consumer brands pioneered the way with 0.6 million sq.ft. leased, followed by luxury brands that also grew their footprint, leasing more than 0.2 million sq.ft. of retail space.
The shortage of good quality retailing space resulted in a 7.5 per cent increase in average rents, and vacancy rates fell to 11.1 per cent. As demand continued to go beyond supply, competition for premium locations grew progressively fiercer.
Looking ahead, Hyderabad and Delhi NCR are expected to account for nearly 70 percent of the new supply in 2025. By 2029, India is set to add an estimated 42.1 million sq.ft. of retail space, strengthening its status as a rising global retail hub. Meanwhile, investor interest is rising, with more retailers seeking institutional funding and REITs actively targeting prime assets.
