Retail Leasing Peaks After Three Years

Fashion and food and beverage brands were at the heart of India’s retail expansion in 2025, together accounting for just over half of all leasing activity. Shopping malls took the lead during the year, emerging as the biggest contributors to gross leasing volumes.

A report by JLL India shows that retail leasing rose 54% year on year in 2025, pushing activity to a three-year high.

What Pushed Retail Leasing to a 3-Year Peak in 2025?

Part of the answer lies in how consumers spent their money throughout the year. Demand held up well, especially in categories tied to lifestyle and discretionary purchases, encouraging brands to expand their physical presence.

Another factor was the steady push by direct-to-consumer brands into offline retail. Leasing by these brands grew 48% during the year, with fashion and apparel, jewellery, beauty, cosmetics, and wellness driving most of the demand. For many, physical stores were less about scale and more about visibility and customer connection.

Where Did Retailers Focus Their Expansion Efforts?

The bulk of leasing activity remained concentrated in a handful of markets. The National Capital Region, Hyderabad, and Bengaluru together accounted for 71% of the total leasing volume in 2025.

In the NCR and Hyderabad, new shopping mall openings shaped the year’s leasing activity, contributing 45% of the total in these markets. Bengaluru followed a slightly different path, with retailers favouring high street locations, which made up nearly half of the city’s leasing volume.

Across the top seven cities, gross leasing of brick-and-mortar retail space touched 12.5 million sq. ft, the highest level seen in three years.

How Are Indian and Global Brands Changing Retail Real Estate?

Much of the expansion was driven by domestic brands, which recorded a 58% year-on-year increase in leased retail space. Indian retailers accounted for 82% of gross leasing activity in 2025, reflecting their growing confidence in physical retail formats.

Supply kept pace with demand. Around 6.3 million sq. ft of new retail space was added during the year, allowing brands to move quickly on expansion plans. There was also increased interest from overseas brands, with 29 new international brands entering India in 2025, the highest in the past five years. These brands include Bershka, Nespresso, COS, Lego, and NEXT, among others.

Looking Ahead

Retail activity is clearly picking up, but the next few quarters will matter more than headline numbers. Much will depend on whether consumer spending stays firm. If footfalls slow, expansion plans could also cool. For investors, it makes sense to keep an eye on rentals, vacancies, and how new malls actually perform after opening. Rising supply and funding costs could force brands to slow down or rethink locations.

Sources

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