Retail Leasing Touched 6.4 msf across Top Eight Cities in 2024

New Delhi, January 22, 2025: Expansionary sentiment among retailers continued to remain positive in calendar year 2024 as retail leasing touched approximately 6.4 million sq. ft. across the top eight cities in India, says a report by real estate consulting firm CBRE South Asia Pvt. Ltd. The report – ‘India Retail Figure H2 2024’ – a strong supply pipeline is expected in 2025, with a few investment-grade assets expected to commence operations in Tier I cities, including Bengaluru, Hyderabad, Delhi-NCR, and Mumbai. Retail supply in CY 2024 stood at 1.2 million sq. ft.

In 2024, the fashion and apparel sector experienced robust demand, particularly within the mid-range, value fashion, and athleisure segments. This strong performance resulted in these categories representing about 37 per cent of the overall retail space take-up during the second half of the year. The homeware and department stores (~13 per cent) and the food and beverage sector (~12 per cent) were the other categories that drove leasing during H2 2024.

The direct-to-consumer (D2C) sector witnessed strong growth, contributing ~7 per cent to the total leasing activity in 2024, with approximately 0.6 mn. sq. ft. of space take-up. Fashion and apparel, along with homeware and department stores, accounted for more than 70 per cent of the leasing within the D2C segment.

Retail space take-up across Tier I cities stood at ~3.2 mn. sq. ft. during the second half of 2024 — at par with the leasing recorded in the previous six-month period. Bengaluru led the space absorption, followed by Hyderabad and Delhi-NCR — these three cities cumulatively accounted for ~58 per cent of the total retail space take-up in H2 2024. Continued growth in investment-grade mall supply and sustained secondary space absorption is expected to drive retail leasing activity in the coming quarters.

Due to adjustments in project timelines, with certain completions deferred to 2025, India saw the addition of approximately 0.7 mn. sq. ft. of Grade A mall space in the July-December 2024.

India continues to position itself as a key market for foreign retailers, with several brands entering the country through strategic local partnerships. Carrefour, a French retail chain, marked its re-entry by signing an agreement with Dubai’s Apparel Group, with stores expected to begin operations in 2025. The fashion and apparel sector witnessed key debuts in 2024, including U.S.-based fashion brand AMIRI, renowned Italian footwear brand Aquazzura, and U.S.-based footwear retailer Foot Locker, which launched its first store in the NCR region. In the luxury segment, notable entries in 2024 included UK-based menswear brand Charles Tyrwhitt in Ahmedabad, French luxury fashion house Maison Margiela in Mumbai, Swiss luxury watch boutique TimeVallée in Mumbai and Bengaluru, and Turkey’s Zen Diamonds in Mumbai. The food and beverage segment also witnessed notable entries during the year, including Kaméi in NCR, and Brunch & Cake and EL&N London in Mumbai.

Anshuman Magazine, Chairman & CEO, India, Southeast Asia, Middle East & Africa, CBRE, said, “India’s retail landscape is set for significant growth in 2025, with primary leasing demand gaining momentum and 5-6 million sq. ft. of Grade A malls expected to commence operations in cities such as Delhi-NCR, Hyderabad, Mumbai, and Bengaluru. Leasing activity is anticipated to remain steady, supported by a robust supply pipeline and strong demand from mid-range fashion, value fashion, athleisure, and jewellery segments.

Retail spaces are evolving into destinations for emotional engagement and storytelling. Retail spaces are transforming into destinations offering a seamless mix of shopping, dining, and entertainment, ensuring a holistic experience for consumers. With innovative approaches like social media engagement, quick commerce, and advanced inventory management, India’s retail sector is poised for a dynamic and transformative year ahead.”

India Retail Outlook 2025

• Sustained Leasing Momentum Expected
  India’s retail leasing activity is expected to maintain a steady pace, with a balanced mix of primary and secondary transactions. Strong demand from segments such as mid-range fashion, value fashion, athleisure, and jewellery are fuelling interest in retail spaces and larger formats, ensuring sustained growth across key locations.
• Supply Rebound Anticipated in 2025
  The country’s retail supply addition is expected to rebound in 2025, with 5-6 million sq. ft. of Grade A malls likely to commence operations across cities. Tier I cities such as Delhi-NCR, Hyderabad, Mumbai, and Bengaluru are anticipated to drive this supply growth significantly.
• Strategic Partnerships to Aid Foreign Brand Entries
  Foreign brands are increasingly entering the Indian market through strategic alliances with leading domestic retail chains. These brands are leveraging various market entry strategies, including collaborations with local retailers, e-commerce platforms, and D2C channels, to tap into India’s dynamic retail landscape.
  Key segments such as fashion and apparel and luxury and personal care products have witnessed a steady growth in foreign brand entries, and this momentum is expected to continue in the coming quarters.
• Experiential Retail to Gain Prominence
  Retailers across categories are increasingly embracing experiential retail strategies to build stronger customer connections, enhance brand loyalty, and stand out in a competitive market. Consequently, mixed-use retail within integrated developments — encompassing office, retail, and residential spaces — is gaining prominence. Retail stores are evolving from transactional spaces to destinations focussing on emotional engagement and storytelling.
• D2C Brands to Continue Strong Growth
  India’s D2C sector continues its growth trajectory, fuelled by rising e-commerce, improved logistics, and an expanding millennial and Gen Z consumer base. Many D2C brands are now exploring offline retail to enhance their omnichannel presence, with developers actively partnering with brands exhibiting strong online traction to expand into physical formats.

Looking into 2025, the ability of brands to adapt to market conditions, evolving consumer expectations, and technological advancements will shape their growth momentum. With the rise of quick-commerce platforms catering to instant consumer gratification, we anticipate greater activity in this space, driven by the addition of newer brands, diversification of product categories, and broader serviceable pin codes.