Retail Leasing in 2025 to Surpass 2023 Levels, 9 MSF Addition Expected, says JLL

New Delhi, February 19, 2025: The Indian retail sector is expected to witness a record-breaking year in 2025, with leasing activity surpassing the growth data of 2023. As brands strengthen their physical presence to complement digital channels, retail developers are investing in experiential formats, high-street locations, and premium mall spaces to meet the growing demand. According to Jones Lang LaSalle Inc, the top 7 Indian cities are set to see the addition of nearly 9 million sq ft of new retail space in 2025, with gross leasing volume expected to surpass 2023’s 8.7 million sq ft.

However, in 2023, retailers continued to grow their footprint across retail formats throughout the year, and gross leasing only moderated by 6 per cent, as the retail sector maintained its momentum despite the restricted inflow of new spaces of exceptional quality.

The report added that Bengaluru accounted for 34 per cent share of the total leasing activity, followed by Delhi NCR 14 per cent, and Mumbai 14 per cent. The concentration of 62 per cent of total retail space take-up in these three Indian megalopolises underscores the strong consumption demand in prime retail centres and key high streets in these markets.

Moreover, the surge in retail leasing activity in 2025 is being fueled by multiple macroeconomic and industry-specific factors. Rapid urban expansion and a growing middle class with higher purchasing power are driving demand for organized retail formats. Consumers are increasingly preferring premium shopping experiences, branded retail, and leisure-driven destinations. Further, both homegrown and global brands are aggressively expanding their physical footprints. Malls and high-street locations are witnessing a surge in leasing activity, with retailers seeking prime spaces in metro cities and emerging micro-markets.

Here’s what some real estate honchos had to say about the trends in retail leasing:

Jatin Goel, Executive Director, Omaxe Group: “The projected growth number of retail leasing in 2025 underscores the robust demand for quality retail spaces, particularly in key cities. Amidst the top 7 cities, NCR and its peripheries in Noida, Gurugram, and Faridabad continue to have a stronghold. The evolving consumer behavior, rising disposable incomes, and the aggressive expansion of global and domestic brands are fuelling this growth trend. In NCR, Faridabad is emerging as a dominant player, attracting large-scale investments due to its improving infrastructure, growing residential catchment, and enhanced connectivity. Kearney India Retail Index 2023 report shows that the growing interest of brands in the Faridabad region has contributed to its improved retail ranking and enhanced ease of doing business. The city ranked at the 13 spot, comparatively better than in 2021. This reflects the clear trend of brands eyeing new and emerging locations and Faridabad becoming an attractive destination for retail developments. Catering to the evolving trends, developers are creating next-gen retail hubs with curated experiences. The city’s evolution into a commercial hub with new supply coming in across high-street and mixed-use developments strengthens its position as one of the key markets to drive leasing growth trends. Faridabad with its strategic location and competitiveness is likely to capture a significant share of the projected growth number.

“Besides, developers are integrating retail, entertainment, hospitality, and office spaces into multi-functional commercial hubs. These spaces are attracting retailers looking for high-footfall environments, blending shopping, dining, co-working, and leisure experiences into a single destination. In Delhi-NCR, micro-markets like the Noida-Greater Noida Expressway are seeing an influx of retail spaces, with developers actively launching new retail projects to cater to demand from both premium and value-driven retail segments.”

Sanchit Bhutani, Managing Director, Group 108: “ Rising consumer demand, brand expansion, and evolving shopping preferences are bringing a wave of unprecedented growth in the Indian retail sector. In the Delhi-NCR region, notably areas like the Noida-Greater Noida Expressway, are experiencing a high demand for premium retail spaces as global and domestic brands seek strategic locations for expansion. The area has emerged as a premium retail corridor, offering high-street destinations that cater to aspirational shoppers and affluent residential catchments. Thus, with seamless connectivity and a thriving ecosystem, we expect this corridor to become a premier retail destination in North India.”

Ravinder Choudhary, Vice-President, Vegas Mall: “The retail real estate in 2025 is ready to see a major transformation. As consumer expectations are evolving beyond just shopping, they now seek immersive, experience-driven environments. At Vegas, we have witnessed a surge in demand for retail spaces that offer entertainment, leisure, and convenience under one roof. This shift has led us to go beyond traditional formats and integrate lifestyle-centric elements. With this sustained retail leasing, we expect the sector to continue growing in the coming years.”

Prakash Mehta, Chairman and Managing Director, Ocus Group: “Retail leasing is experiencing a strong momentum, driven by the resurgence of high-street retail and evolving investment trends. Global brands and businesses are increasingly drawn to strategically located high-street projects, offering long-term appreciation and stable rental yields. As their presence expands, demand for prime retail spaces is intensifying, especially in corridors like Dwarka Expressway. Further, areas like Sector 99 are also gaining traction for their high visibility and long-term value appreciation. Amidst this growth, we expect the retail sector to grow, with a strong preference for developments that blend retail with experiential and community-driven formats.”

Harsh Gupta, CEO, Sundream Group: “Retail leasing is witnessing strong momentum, driven by expanding consumer demand and evolving investment trends. Noida has become a preferred destination for global brands and businesses due to its strategic location, excellent connectivity, and growing commercial ecosystem. With rising footfalls and increasing spending power, the demand for premium retail spaces is on the rise. As the sector continues to evolve, we anticipate sustained growth, particularly for developments that offer a seamless blend of retail, entertainment, and community-driven experiences.”

Thus, retail leasing in India is set for a historic surge in 2025, with 9 million sq. ft of new retail space expected to be added across major urban markets. The growth trajectory is anticipated to be shaped by rising consumer spending, expanding brand footprints, and the increasing appeal of high-street retail and experiential shopping destinations. As experiential retail formats gain momentum, India’s retail sector is set for sustained growth well beyond 2025.