India retail market dynamics: Q4 2024

During the calendar year 2024, 8.1 million sq. ft of area was leased by retailers in shopping malls and prominent high streets across India’s top seven cities (Mumbai, Delhi NCR, Bengaluru, Kolkata, Chennai, Pune, and Hyderabad). 2024 witnessed new retail space additions of nearly 1.7 million sq. ft across 7 retail developments. Despite limited infusion of new spaces of superior quality, momentum in retail sector’s gross leasing remained unaffected as retailers continued to expand footprint across retail formats throughout the year, with gross leasing moderating by only 6% over 2023.

Bengaluru accounted for 34% share of the total leasing activity, followed by Delhi NCR (14%), and Mumbai (14%). The concentration of 62% 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. With a significant 2.8 million sq. ft share in leasing activity, Bengaluru, alone, surpassed the combined leasing volume of Delhi-NCR and Mumbai. Notably, the share of other cities such as Hyderabad and Chennai increased from 10% and 5% of the leasing volume in 2023 to 14% and 10% at the end of 2024, respectively.

2023 witnessed a five year high as new retail supply of 6.2 million sq. ft became operational across the top 7 cities. The addition of 16 new retail developments in 2023 supported the expansion plans of retailers and helped in reaching gross leasing high of 8.7 million sq. ft in the year. However, the new supply in the retail sector in 2024 plunged by 73% y-o-y hampering the new retail space take-up by interested retailers looking for quality retail spaces. Despite this decline in new retail supply, the leasing moderated only by 6% over 2023 to 8.1 million sq. ft. Retailer appetite for prime retail locations remained firm throughout 2024 and categories such as Fashion and Apparel continued to amass the highest percentage share in the total retail leasing pie.

In 2024, 27 new brands of international origin entered India, nearly doubling from 14 in 2023. In the past four years, 60 retailers of international origin have forayed in the country to cater to Indian consumers perpetual preference for global brands. The entry of these brands in 2024 represents a 45% share of the total international brands that entered India since 2021. Beauty, Cosmetics and Wellness, Footwear, Bags and Accessories and Fashion and Apparel were the top three retailer categories to set retail footprint in the country in 2024.

Despite continued interest from international retailers, domestic retailers dominated the gross leasing with more than 80% share, leasing approximately 6.5 million sq. ft in 2024. Direct-to-Consumer (D2C) brands also contributed to 8% share in total leasing, comprising 0.6 million sq. ft retail spaces leased in physical retail destinations during the year. Both malls and high streets remained equally popular for India's D2C brands seeking to establish a connect and brand identity with the discerning consumers spoilt for choice.

For more insights, download the report.