India retail leasing hits 3.1 mn sq ft in Q1 2026, foreign brands surge 48%
Synopsis
Foreign brands are doubling down on India's retail story — international retailer leasing surged 48% year-on-year in Q1 2026 even as overall volumes held steady at 3.1 million sq ft. With a 46.1 million sq ft institutional pipeline through 2030 and D2C brands moving offline, India's retail real estate cycle looks set for a structural re-rating, not just a cyclical uptick.
Key Takeaways
India's retail leasing totalled 3.1 million sq ft across the top seven cities in Q1 2026 (January–March).
Leasing was down 15% quarter-on-quarter but up 1% year-on-year , reflecting supply-side constraints rather than demand weakness.
Foreign brands recorded 48% year-on-year leasing growth , the standout performer of the quarter.
Kolkata captured 10% national market share , supported by new asset completions.
Full-year 2025 gross leasing hit 12.5 million sq ft — a 54% YoY rise and a three-year peak.
Institutional-grade retail pipeline stands at 46.1 million sq ft through 2030 , per JLL.
India's retail leasing across the top seven cities totalled 3.1 million square feet in Q1 2026 (January–March), according to a JLL report released on Tuesday, 13 May 2026. While the figure reflects a 15% quarter-on-quarter moderation, it marks a 1% year-on-year uptick — signalling continued resilience in India's retail real estate demand despite a tighter supply pipeline.
Why Leasing Moderated Quarter-on-Quarter
The sequential dip is largely attributed to the absence of sizeable new institutional-grade mall supply in the January–March window, following a strong infusion of 2.5 million sq ft in Q4 2025. Developers have been cautious about timing new completions, creating a temporary supply gap that has capped absolute leasing volumes even as retailer appetite remains healthy.
Foreign Brands Lead the Charge
Established international retailers stood out as the most aggressive expanders in Q1 2026, recording a 48% year-on-year growth in leasing activity. According to the JLL report, this momentum is underpinned by sustained expansion strategies targeting India's aspirational middle class and resilient domestic consumption patterns — a thesis that global brands have increasingly backed with physical store commitments rather than digital-only plays.
This is consistent with a broader trend of D2C brands migrating to physical formats, value fashion operators scaling up, automobile retailers carving out showroom space, and food and beverage (F&B) operators expanding their footprint — themes that defined 2025 and appear to be carrying into 2026.
City-Level Dynamics: Multi-Format Strategy Takes Hold
Rahul Arora, Head of Office Leasing and Retail Services and Senior Managing Director (Karnataka, Kerala) at JLL India, highlighted a divergence in city-level strategies. While Bengaluru and Chennai retailers are pivoting to established high street corridors, Delhi-NCR and Hyderabad continue to favour mall-centric expansion. Arora noted that successful expansion today demands a multi-format approach balancing aspirational enclosed destinations with street-level accessibility.
Kolkata also emerged as a meaningful contributor, capturing a 10% national market share in Q1 2026, bolstered by healthy uptake in newly inaugurated retail assets in the city.
2025 in Review: A Redefining Year
The Q1 2026 data comes on the back of a landmark 2025 for Indian retail real estate. Annual gross leasing hit 12.5 million sq ft in 2025 — a 54% year-on-year growth and a three-year peak. New supply infusion of nearly 6 million sq ft matched heightened demand, making it one of the most active years on record for the sector. Key demand drivers included D2C brand expansion, value fashion, automobile showrooms, and F&B operators.
Pipeline and Outlook Through 2030
Looking ahead, the JLL report points to an institutional-grade retail pipeline of 46.1 million sq ft through 2030. With demand consistently outpacing supply in the near term, Arora said the sector is witnessing not just resilience but the foundation for India's next retail real estate expansion cycle, driven by rising consumption, D2C physical migration, and retailer format sophistication. The report anticipates a demand trajectory in 2026 broadly similar to 2025's record run.
Point of View
As they did in Q1, volumes soften even if underlying demand is intact. The real story is the 46.1 million sq ft pipeline: if that supply lands with the right format mix — high street, mall, and experiential — India could see a structural re-rating of retail real estate. The D2C-to-physical migration adds a new demand layer that traditional mall developers were not originally built to serve.
NationPress
10 Aug 2026
Frequently Asked Questions
Why did India's retail leasing fall quarter-on-quarter in Q1 2026?
Retail leasing moderated 15% quarter-on-quarter primarily because of limited new institutional-grade mall supply in Q1 2026, following a large 2.5 million sq ft mall infusion in Q4 2025. Demand from retailers remained healthy; the dip was supply-driven, not demand-driven.
How much did foreign brands grow their retail leasing in India?
Established international retailers recorded 48% year-on-year leasing growth in Q1 2026, according to the JLL report. This reflects sustained expansion strategies targeting India's aspirational middle class and resilient domestic consumption.
What is the outlook for India's retail real estate through 2030?
JLL estimates an institutional-grade retail pipeline of 46.1 million sq ft through 2030. With demand consistently outpacing near-term supply, the report anticipates a demand trajectory in 2026 similar to 2025's record 12.5 million sq ft.
Which cities led retail leasing activity in Q1 2026?
Delhi-NCR and Hyderabad led mall-centric leasing activity, while Bengaluru and Chennai saw retailers pivot to high street corridors. Kolkata also contributed meaningfully, capturing 10% of national market share in Q1 2026.
What were the key demand drivers for India's retail sector in 2025 and 2026?
Key demand drivers included D2C brands migrating to physical stores, value fashion operators, automobile retailers, and F&B operators expanding their footprint. These themes, prominent in 2025, have continued into 2026.
