India’s retail sector recorded gross leasing of 3.1 million sq ft across the top seven cities during Q1 2026 (January–March), with Mumbai leading the market with a 26% share of total leasing activity. Bengaluru and Delhi-NCR jointly ranked second, each accounting for 21% of the quarterly absorption. Together, the three cities accounted for 68% of the total leasing volume, according to a JLL report.
In comparison, gross leasing stood at 3.6 million sq ft during the fourth quarter of calendar year 2025 across the seven major cities, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai and Pune. On a year-on-year basis, however, leasing activity remained largely flat in the March quarter, it said.
“The quarterly moderation in retail leasing is largely due to the absence of sizeable new mall supply of institutional-grade quality, following the strong infusion of 2.5 million sq ft of mall space in Q4 2025 (October–December 2025),” the consultant said.
Only 0.25 million sq ft of new mall supply was added during the March quarter.
The supply-demand imbalance pushed high streets to become the dominant leasing platform, accounting for 48% of quarterly transactions, while shopping malls accounted for 40% despite limited new inventory. The shift highlights retailers’ flexibility in pursuing expansion across multiple formats when availability in preferred venues remains constrained, it noted.
Supply constraints reshape leasing patterns
The quarterly moderation stems from a temporary pause in new institutional-grade mall deliveries following Q4 2025’s robust 2.5 million sq. ft addition. With just 0.25 million sq. ft of new mall supply entering the market in Q1 2026, bringing total retail stock to 92.4 million sq. ft, occupiers pivoted toward alternative retail formats such as high streets and prime retail developments to meet expansion goals, JLL said in the report.
Mumbai, Bengaluru, and Delhi NCR form the power trio
Geographic concentration intensified during the quarter, with three metros commanding more than two-thirds of national leasing activity. Mumbai led all markets with a 26% share of the city leasing pie, while Bengaluru and Delhi NCR tied for second position at 21% each. Together, these three markets represented 68% of total quarterly absorption, it noted.
Secondary markets also contributed meaningfully to national volumes. Kolkata captured a 10% market share, bolstered by healthy uptake in newly inaugurated assets. Hyderabad (9%), Chennai (7%), and Pune (6%) rounded out the top seven cities with steady leasing momentum, it said.
Market-specific dynamics revealed divergent format preferences. Delhi NCR and Hyderabad maintained shopping mall-centric activity despite the national trend toward high streets, reflecting sustained retailer appetite for premium enclosed centres in these geographies. Conversely, Bengaluru and Chennai experienced pronounced high street expansion, driven by the absence of new mall supplies over the past year, which channelled retailer demand toward established street-front locations, it said.
JLL said that the influx of new foreign brands also reached a new high in 2025, and that same momentum continues to this day. In the past 15 months, over 30 foreign brands entered India to capture demand across fashion, food and beverage, beauty and cosmetics and lifestyle.
A few foreign brands that had shut down their operations in India in the past are relaunching in India with multi-city expansion plans. D2C brands, value fashion, retail space take-up by automobile players, and expansion by F&B operators were key themes that played out last year, it noted.
Pipeline of 46.1 mn sq ft positions the sector for long-term growth
A substantial development pipeline of 46.1 million sq. ft is scheduled for delivery between 2026 and 2030 across India’s top seven cities. It will provide the necessary impetus to accommodate long-term retailer expansion plans.
As this institutional-grade inventory becomes operational, leasing volumes are projected to accelerate while vacancy rates continue to compress, creating favourable conditions for rental growth and attracting increased institutional capital to the sector, the consultant said.
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