According to the CBRE South Asia Pvt. Ltd report, expansionary sentiments amongst retailers continued to remain positive in CY 2024 as retail leasing touched ~6.4 mn. sq. ft. across the top 8 cities in India. A strong supply pipeline is expected in 2025, with a few investment-grade assets expected to commence operations in tier-I cities, including Bengaluru, Hyderabad, Delhi-NCR, and Mumbai. Retail supply in CY 2024 stood at 1.2 mn. sq. ft.
In 2024, the fashion and apparel sector experienced robust demand, particularly within the mid-range, value fashion, and athleisure segments. This strong performance resulted in these categories representing ~37% of the overall retail space take-up during the second half of the year. The homeware and department stores (~13%) and the food and beverage sector (~12%) were the other categories that drove leasing during H2 2024.
The direct-to-consumer (D2C) sector witnessed strong growth, contributing ~7% to the total leasing activity in 2024, with approximately 0.6 mn. sq. ft. of space take-up. Fashion and apparel, along with homeware and department stores, accounted for more than 70% of the leasing within the D2C segment.
Retail space take-up across tier-I cities stood at ~3.2 mn. sq. ft. during the second half of 2024 — at par with the leasing recorded in the previous six-month period. Bengaluru led the space absorption, followed by Hyderabad and Delhi-NCR — these three cities cumulatively accounted for ~58% of the total retail space take-up in H2 2024. Continued growth in investment-grade mall supply and sustained secondary space absorption is expected to drive retail leasing activity in the coming quarters.
Due to adjustments in project timelines, with certain completions deferred to 2025, India saw the addition of approximately 0.7 mn. sq. ft. of Grade A mall space in the Jul-Dec’24.
India continues to position itself as a key market for foreign retailers, with several brands entering the country through strategic local partnerships. Carrefour, a French retail chain, marked its re-entry by signing an agreement with Dubai’s Apparel Group, with stores expected to begin operations in 2025. The fashion and apparel sector witnessed key debuts in 2024, including U.S.-based fashion brand AMIRI, renowned Italian footwear brand Aquazzura, and U.S.-based footwear retailer Foot Locker, which launched its first store in the NCR region. In the luxury segment, notable entries in 2024 included UK-based menswear brand Charles Tyrwhitt in Ahmedabad, French luxury fashion house Maison Margiela in Mumbai, Swiss luxury watch boutique TimeVallée in Mumbai and Bengaluru, and Turkey’s Zen Diamonds in Mumbai. The food and beverage segment also witnessed notable entries during the year, including Kaméi in NCR, and Brunch & Cake and EL&N London in Mumbai.
India Retail Outlook 2025
Sustained Leasing Momentum Expected - India’s retail leasing activity is expected to maintain a steady pace, with a balanced mix of primary and secondary transactions. Strong demand from segments such as mid-range fashion, value fashion, athleisure, and jewellery are fuelling interest in retail spaces and larger formats, ensuring sustained growth across key locations.
Supply Rebound Anticipated in 2025 - The country’s retail supply addition is expected to rebound in 2025, with 5-6 million sq. ft. of Grade A malls likely to commence operations across cities. Tier-I cities such as Delhi-NCR, Hyderabad, Mumbai, and Bengaluru are anticipated to drive this supply growth significantly.
Strategic Partnerships to Aid Foreign Brand Entries - Foreign brands are increasingly entering the Indian market through strategic alliances with leading domestic retail chains.
These brands are leveraging various market entry strategies, including collaborations with local retailers, e-commerce platforms, and D2C channels, to tap into India’s dynamic retail landscape.
Key segments such as fashion and apparel and luxury and personal care products have witnessed a steady growth in foreign brand entries, and this momentum is expected to continue in the coming quarters.
Experiential Retail to Gain Prominence - Retailers across categories are increasingly embracing experiential retail strategies to build stronger customer connections, enhance brand loyalty, and stand out in a competitive market. Consequently, mixed-use retail within integrated developments — encompassing office, retail, and residential spaces — is gaining prominence. Retail stores are evolving from transactional spaces to destinations focussing on emotional engagement and storytelling.
D2C Brands to Continue Witnessing Strong Growth; Quick-Commerce to Remain in the Spotlight -India’s D2C sector continues its growth trajectory, fuelled by rising e-commerce, improved logistics, and an expanding millennial and Gen Z consumer base. Many D2C brands are now exploring offline retail to enhance their omnichannel presence, with developers actively partnering with brands exhibiting strong online traction to expand into physical formats.
Looking into 2025, the ability of brands to adapt to market conditions, evolving consumer expectations, and technological advancements will shape their growth momentum. With the rise of quick-commerce platforms catering to instant consumer gratification, we anticipate greater activity in this space, driven by the addition of newer brands, diversification of product categories, and broader serviceable pin codes.
