India's Retail Leasing Soars to 3.2 Million Sq. Ft in Q3 2025 as Domestic and Luxury Brands Expand

India’s retail real estate market continued to strengthen in Q3 2025, with gross leasing across the top seven cities rising to 3.2 million sq. ft, a robust 65% year-on-year (YoY) increase, according to new data from JLL. The surge reflects the combined impact of supply infusions in key markets, sustained momentum from domestic retailers, and broad-based expansion across categories, including apparel, food and beverage, daily needs, and luxury.

The July–September quarter marked a critical phase for India’s retail sector, with developers delivering new, investment-grade space in previously supply-constrained markets. Delhi NCR and Hyderabad led national leasing activity with a combined 57% share, underscoring how new mall completions and high-street vibrancy are shaping retailer expansion strategies.

One of the defining trends of Q3 2025 was the overwhelming presence of domestic retailers, who accounted for 81% of gross leasing during the quarter. According to JLL, indigenous brands leased 2.6 million sq. ft in Q3 alone — a 76% YoY increase from Q3 2024. Meanwhile, foreign brands contributed 19% of leasing activity.

This growth reflects the scale at which Indian apparel, grocery, and food services companies are consolidating presence across malls and high streets. The report highlights that fashion and apparel led leasing with a 35% share, followed by food & beverage at 16%, and daily needs and grocery at 11%. Daily needs categories, in particular, saw heightened demand as retailers continued to position themselves as anchor tenants in premium retail developments.

A structural shift underpinning this growth is the steady rise of direct-to-consumer (D2C) brands transitioning from online-heavy models to physical retail. Categories such as apparel, beauty, jewellery, cosmetics, and wellness saw meaningful expansion.

“D2C brands have been making significant investments in their click-and-mortar strategies… expanding their physical presence across retail formats,” said Dr. Samantak Das, Chief Economist and Head of Research & REIS, India, JLL. He noted that these brands are poised to claim an increasingly larger share of leasing activity as they pursue omnichannel models that integrate experience-driven store formats with digital reach.

Luxury retail also gained momentum in 2025. In the first nine months (January–September), luxury brands leased 0.2 million sq. ft, a 19% YoY increase over the corresponding period in 2024. While new brand entries remained limited, JLL highlighted that the rising leased area reflects strong underlying demand and the availability of high-quality spaces suited to flagship stores.

“The growth trajectory in leased area demonstrates strong market fundamentals and the availability of investment-grade retail infrastructure,” said Rahul Arora, Head – Office Leasing & Retail Services and Senior Managing Director (Karnataka, Kerala), India, JLL.

Among cities, Delhi NCR accounted for 35% of total gross leasing in Q3 2025, supported by strong uptake in two newly constructed malls. Hyderabad contributed 12%, driven largely by high-street expansion. Together, they shaped more than half of India’s quarterly leasing activity.

Mumbai followed with 0.6 million sq. ft of leasing, while Bengaluru recorded 0.4 million sq. ft. Chennai and Kolkata saw stable demand, and Pune witnessed a marginal dip compared to Q2.

New supply also played a pivotal role. With 1.5 million sq. ft of fresh retail stock delivered in Delhi NCR and Hyderabad, several retailers who had postponed expansion due to space constraints were able to secure stores in prime micro-markets.

With the eight-quarter rolling average stabilising between 2–2.5 million sq. ft, JLL projects that retail gross leasing may touch 10.5–11.5 million sq. ft by the end of 2025 — surpassing earlier estimates of approximately 10 million sq. ft. The sector also stands to benefit from an additional 4.7 million sq. ft of new retail supply scheduled for Q4 2025.

Looking ahead, nearly 37 million sq. ft of new mall supply across India’s major cities is expected to become operational by 2029. This pipeline, combined with the upgrading and repurposing of existing organised retail formats, aligns closely with retailers’ long-term expansion and omnichannel strategies.

The strong performance of Q3 2025, driven by domestic dominance, rising luxury presence, and the fast-growing D2C segment, reinforces the sector’s resilience and positions India’s retail market for another record year.