India's retail sector witnessed 2.6 million sq. ft. of leasing in Q2 2025, indicative of 17% Y-o-Y growth over Q2 2024. Across the top 7 cities, Bengaluru and Delhi NCR together contributed 46% to the overall gross leasing volume for Q2 2025.
India’s retail sector is witnessing fast-paced expansion as both domestic and foreign retailers widen their footprint across major markets. In H1 2025 (January to June), India’s top 7 cities witnessed 5.7 million sq. ft of retail space take-up, registering a remarkable 69% year-on-year (Y-o-Y) growth. Q2 2025 (April-June) noted 2.6 million sq. ft. of leasing, indicative of 17% Y-o-Y growth over Q2 2024. However, Q2 2025 recorded a 15% decline compared to the preceding quarter (January-March) of 2025. The high gross leasing of 3.1 million sq. ft in January-March period helped the H1 2025 leasing volume attain a strong double digit YoY growth over H1 2024.
The quarterly decline in Q2 2025 leasing is a short-term blip, attributed to supply constraints as the second quarter of 2025 remained bereft of any major completions, except one new mall in Hyderabad. Despite this scenario, a 165% YoY growth in new mall supply was noted in H1 2025 as sizeable mall supply across Mumbai, Delhi NCR and Hyderabad came on the block in the first quarter. Interestingly, the first half of 2025 has already achieved 70% of last year’s annual leasing volume which stood at 8.1 million sq. ft.
Across the top 7 cities, Bengaluru and Delhi NCR together contributed 46% to the overall gross leasing volume for Q2 2025. While food and beverage as a category remained popular in Delhi NCR in terms of space take-up, jewellery and home furnishings retailers expanded steadily in Bengaluru during this period.
Fashion & Apparel and Food & Beverage (F&B) continued to be the leading retailer categories, contributing 33% and 22% respectively to the gross leasing total during Q2 2025. Unlike past trends, jewellery emerged as the third leading category, surpassing Entertainment, which typically used to be amongst the top three retailer categories until the first quarter of 2025. From a 16% share in gross leasing in Q1 2025, the share of Entertainment has dwindled to 6% in Q2 2025. Jewellery retailers comprised a 9% share in gross leasing with 0.23 million sq. ft of prime retail space consumed in the second quarter.
While domestic retailers command an 85% market share in Q2 2025, the 15% presence by international brands is inclusive of 13 new global entrants—7 in F&B alone. India's strategic position for retail expansion is evidenced by international brand entry more than doubling year-over-year in H1 2025, driven by the perfect confluence of young demographic, rising disposable income, and premium consumption preferences that are particularly attractive in the current global economic landscape.
Nearly 6 million sq. ft of new retail supply may become operational in the second half of 2025 and will support the entry and expansion of retailers in the near term. With these new additions to the retail stock, the gross leasing activity is expected to reach new heights and may surpass the 10 million sq. ft annual mark in 2025.
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