Mumbai, Apr 13: India’s retail real estate sector is undergoing a significant transformation, with 4.3 million sq. ft. of retail absorption recorded across the top 7 cities in H2 2025, according to the latest RELEAP 2026 report by ANAROCK Group. The findings point to a clear shift toward experience-led retail formats, reshaping how brands, developers, and consumers engage with physical spaces.
The report reveals that leasing momentum remained resilient despite a dynamic macroeconomic environment, underscoring continued retailer confidence in brick-and-mortar expansion strategies.
Experience-Led Retail Drives Demand
Leasing activity was primarily led by apparel, followed by entertainment, hypermarkets/supermarkets, and food & beverages. This trend highlights a growing consumer preference for immersive, engagement-driven retail experiences rather than purely transactional spaces.
Commenting on the findings, Anuj Kejriwal, CEO – Retail & CEO – EMEA, ANAROCK Group, said:
“India’s retail real estate story is entering its most exciting chapter yet. The sector has moved beyond square footage and rental metrics — it is now about delivering experiences that consumers cannot find online.”
Mid-Sized Stores Dominate Transactions
Retailers continued to favor mid-sized store formats (1,000–5,000 sq. ft.), which emerged as the most preferred transaction size. These formats offer an optimal balance between cost efficiency, scalability, and brand visibility, making them ideal for expansion in a competitive market.
Strong Supply Pipeline Led by NCR and Hyderabad
On the supply side, Delhi NCR and Hyderabad together account for nearly 70% of upcoming retail supply, indicating strong developer confidence in these high-growth corridors.
Developers are increasingly focusing on destination-led and mixed-use developments, integrating retail with entertainment, dining, and lifestyle offerings to create holistic consumer experiences.
City-Wise Demand Reflects Diverse Market Dynamics
The report highlights distinct demand patterns across major cities:
- Mumbai and NCR: Strong traction in apparel and entertainment-driven leasing
- Bengaluru and Hyderabad: Growth led by anchor categories such as hypermarkets and family entertainment centres
- Chennai: Continued demand in discretionary segments like apparel and jewellery
This divergence reinforces that India’s retail market requires localized strategies tailored to consumer behavior and demographics.
High Streets Gain Momentum Amid Limited Mall Inventory
A key highlight of the report is the strong performance of high-street retail, with several prime micro-markets witnessing notable rental appreciation.
Limited availability in premium malls has prompted brands—particularly in fashion, luxury, and F&B—to increasingly turn to high streets as a viable expansion alternative. While mall rentals remained largely stable, top-tier Grade A malls continued to show selective growth.
Outlook: Strong Growth Backed by Structural Drivers
With a robust development pipeline, rising consumption, and a growing preference for experience-led formats, India’s retail real estate sector is poised for sustained growth in the near to medium term. The evolving ecosystem reflects a maturing market driven by innovation, consumer engagement, and strategic expansion.
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