India's Retail Sector Sees Modest Quarter Despite Strong Pipeline of New Supply
In the first quarter of 2026, India's retail sector recorded a gross leasing volume of 3.1 million sq ft across the top seven cities, with Mumbai leading the market with a 26% share of total leasing activity.
City-wise Leasing Activity Breakdown
- Mumbai: 26% market share, with a strong leasing activity of 808,000 sq ft
- Bengaluru and Delhi-NCR: Joint second position at 21% each, with a leasing activity of 658,000 sq ft each
- Kolkata: 10% market share, with a leasing activity of 310,000 sq ft, bolstered by healthy uptake in newly inaugurated assets
- Hyderabad: 9% market share, with a leasing activity of 279,000 sq ft
- Chennai: 7% market share, with a leasing activity of 217,000 sq ft
- Pune: 6% market share, with a leasing activity of 186,000 sq ft
Supply-Demand Imbalance
The supply-demand imbalance in the retail sector 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.
Shift towards Alternative Retail Formats
With just 0.25 million sq ft of new mall supply entering the market in Q1 2026, retailers pivoted towards alternative retail formats such as high streets and prime retail developments to meet expansion goals.
JLL Report Highlights
- India's retail sector saw a modest quarter with a gross leasing volume of 3.1 million sq ft across the top seven cities.
- Mumbai led the market with a 26% share of total leasing activity, followed by Bengaluru and Delhi-NCR at 21% each.
- The supply-demand imbalance pushed high streets to become the dominant leasing platform, accounting for 48% of quarterly transactions.
- A substantial development pipeline of 46.1 million sq ft is scheduled for delivery between 2026 and 2030 across India's top seven cities.
- The influx of new foreign brands also reached a new high in 2025, and same momentum continues to this day.
Long-term Growth Prospects
A substantial development pipeline of 46.1 million sq ft is scheduled for delivery between 2026 and 2030 across India's top seven cities, providing the necessary impetus to accommodate long-term retailer expansion plans.
Key Themes in the Retail Sector
- D2C brands
- Value fashion
- Retail space take-up by automobile players
- Expansion by F&B operators