India’s Retail Real Estate Boom: What’s Fuelling Investor Confidence

Rising consumer aspirations, favourable demographics and a clear shift towards organised, experience-driven spaces are constantly shaping the retail real estate market. This phase is defining the pan-India story, where the demand isn’t just about more stores or bigger malls; it’s about better-designed, multi-sensory environments that cater to a diverse consumer base.

Per CBRE research, “India Market Monitor Q2 2025- Retail”, supply addition in the retail sector witnessed a significant boost in the first half of 2025 as approximately 2.2 mn sq ft (MSF) of new retail space became operational. Fashion and apparel brands continued to lead space take-up, accounting for a 37 per cent share of the overall leasing during Q2 2025.

Shopping malls continued to refine their tenant mix to enhance the visitor experience, integrating a wider array of entertainment, dining and innovative retail formats. With several investment-grade malls nearing completion, the market anticipates a significant expansion of prime leasing opportunities for both international and domestic retailers.

At the heart of this retail boom lies a significant generational shift in consumer behaviour. Urban millennials, Gen Z and even Gen Alpha are shaping a new retail reality. Their expectations go beyond products and seek environments that engage all senses.

Developers are responding with curated ecosystems, where shopping is just one part of a wider mix that includes food, entertainment, leisure and even co-working zones. This evolution is restoring investor confidence, especially in regions like Delhi-NCR, where fresh institutional capital is finding its way back into high-potential retail assets that align with the new consumer mindset.

Mohit Goel, MD, Omaxe Group says, “NCR’s retail sector has always been dynamic, but what’s unfolding now goes beyond the usual hotspots.”

The momentum is shifting towards its emerging locations, like Faridabad, which are entering a new era of retail altogether. No longer seen as just a peripheral market, Faridabad is the new refined shopping destination, where global brands, premium formats and experience-led spaces are taking centre stage.

“With stronger infrastructure, evolving demographics and a growing appetite for organised retail, we see Faridabad positioning itself as an upscale region that blends access, aspiration, and ambience.”

Pankaj Jain, Founder and CMD, SPJ Group, says, “Over the years, the commercial segment has been clocking high growth in Gurugram, and has led to a boom in retail leasing. A fusion of fine dining, fashion, entertainment and leisurely indulgences is what people now expect.”

Yet, the true retail renaissance is now happening in Gurugram’s untapped, high-potential pockets where footfall is huge and spending is more diverse. “These emerging locations are attracting brands, and we as developers believe these pockets are ripe for curated retail formats that mix convenience with brand discovery.”

A report by JLL noted that the retail real estate sector saw a 69 per cent YoY growth in leasing activity during the first half of 2025, where the top seven cities recorded 5.7 MSF of retail space leased. Bengaluru (0.67 MSF ) and Delhi-NCR (0.53 MSF) emerged as the top performers in Q2, contributing a combined 46 per cent of the gross leasing volume.

Bengaluru stood out for its strong take-up in the jewellery and home furnishings categories while food and beverage dominated retail leasing in Delhi-NCR.

Besides, with technology paving the way for personalised retail experience, retailers are now leveraging AI to better understand shopper preferences while real-time inventory systems are ensuring smoother operations on the backend. The gap between online and offline is fading with omnichannel strategies enabling a seamless consumer journey.

Ashwani Kumar, Pyramid Infratech, says, “Highstreet retail is surging along Gurugram’s high-potential corridors like the Dwarka Expressway and Southern Peripheral Road, where streetfacing boutiques and cafes are redefining how we shop. These emerging arteries are not just about retail transactions; they feature retail spaces that are walkable, humanscale shopping districts that feel alive at every hour.”

The appeal lies in their connectivity, ambience, and spontaneity. “As developers, we acknowledge how highstreet formats here yield not just rental returns but vibrant neighbourhood anchors, and we look forward to continuing to contribute to the segment.”

Prakash Mehta, CMD, Ocus Group, says, “India’s retail sector is seeing an accelerated growth driven by rising consumer aspirations, shifting shopping behaviours and aggressive brand expansion. High-street retail continues to gain ground supported by positive investor sentiment and strong leasing activity across urban corridors.”

Gurugram remains a key player in this growth story with emerging micro-markets like Sector 68 along Sohna Road showing strong potential owing to its strategic location, excellent connectivity and proximity to a growing residential base.

“As brands deepen their presence, we believe that the demand for premium retail spaces will only increase, offering immersive experiences and community-centric environments.”

Therefore, the retail real estate boom is not just a fleeting trend anymore. As technology bridges offline and online journeys and as investors double down on quality assets and high-footfall zones, the sector is primed for sustained growth.