Retail Leasing Skyrockets in 2025; Experts Warn of 2026 Supply Crunch

• India's retail real estate market is set to close 2025 on a strong note, with leasing activity expected to cross 10 million square feet, a 15% growth from the previous year.
• Robust consumption growth, rising discretionary spending, and rapid offline expansion by digital-first brands are fueling this demand, with Delhi-NCR and Hyderabad leading the activity.
• A potential supply crunch looms for 2026, as developers and retailers express concern that the supply pipeline, projected at 16.6 msf of Grade-A space, may not keep pace with rising demand.
• Gurugram continues to be a premium retail destination, while emerging markets like Faridabad are attracting retailers due to improved connectivity and cost-effectiveness, driving rental appreciation.
• D2C brands now account for 18% of leasing activity, and tier-2 cities are matching metros in leasing momentum, indicating a broad-based expansion, but timely project delivery is crucial.

Why It Matters: India's retail leasing is booming in 2025, but a potential supply shortage could challenge growth in 2026.