Mumbai, Hyderabad, and Delhi-NCR led the charge, together making up 62% of all retail space absorption
Bengaluru: India’s retail real estate market witnessed a significant surge in Q1 2025, with a 100% year-on-year increase in new supply, totaling approximately 2.2 million sq. ft., according to a report by commercial real estate services & investment firm CBRE.
This expansion was fueled by robust leasing activity, particularly in the fashion and apparel sector, which accounted for 27% of the overall take-up, followed by entertainment and homeware segments.
Mumbai, Hyderabad, and Delhi-NCR led the charge, together making up 62% of all retail space absorption. The sharp increase signals growing confidence among both domestic and international retailers, as well as a shift toward experience-led mall environments.
Mumbai alone accounted for 58% of the new supply, followed by Hyderabad (28%) and Delhi-NCR (13%).
On the leasing front, domestic retailers continued to dominate, accounting for 81% of leasing activity—up from 80% in the previous quarter. However, international interest remained robust, with American and EMEA retailers increasing their presence to 11% and 22%, respectively.
The report finds that fashion and apparel category was the key growth engine, reflecting the segment’s ongoing expansion, especially among mid-range and international brands seeking larger formats in high-footfall areas. Homeware and department stores also saw increased activity, while entertainment and direct-to-consumer (D2C) brands started to gain momentum in physical retail.
Quarterly rental growth further underscored the strength of the market, with key high street and mall micro-markets in Delhi-NCR, Bengaluru, Mumbai, Hyderabad, and Chennai witnessing rental hikes between 1% and 7%. South Extension in Delhi-NCR, 100 Feet Road in Indiranagar (Bengaluru), and South Mumbai saw some of the steepest rises, indicating strong demand in these premium pockets.
Looking ahead, leasing opportunities are expected to grow further, supported by the imminent completion of investment-grade malls across India. Also, international and domestic brands are actively seeking larger spaces in well-located, experiential retail destinations.
