Malls make a comeback: Retail space demand jumps 20%

India’s retail leasing market remained resilient in the first half of 2026 despite economic headwinds, with leasing activity rising 20% year-on-year to about 3.9 million sq ft. The growth came even as inflation worries and geopolitical uncertainties made businesses cautious.

A CBRE report attributed the expansion to continued retailer growth, noting that upcoming Grade A retail projects and infrastructure development could further push demand towards suburban and emerging locations.

The report said organised retail real estate is likely to maintain its growth momentum, with fashion and apparel, entertainment, jewellery and experience-led retail formats expected to drive expansion.


In the January-June period, nearly 0.9 million square feet of new retail supply became operational, with Delhi-NCR accounting for all of them.

With around 40 per cent of total space take-up, Fashion & Apparel remained the biggest contributor, Food & Beverage accounted for around 14 per cent, and Entertainment about nine per cent.

Jewellery and Homeware & Furnishings had a share of around seven per cent each, followed by Consumer Electronics at six per cent.

As per CBRE, fashion and apparel retail demand was stronger outside the major metropolitan cities, accounting for nearly 69 per cent in both Chandigarh and Jaipur, and about 65 per cent in Kochi.

Domestic retailers reportedly formed more than 70 per cent of leasing activity in H1, while direct-to-consumer (D2C) brands contributed around 28 per cent of overall leasing.

Additionally, according to the report, institutional investment in organised retail real estate is expected to remain strong, with malls focusing on experience-led formats and mixed-use developments to engage consumers.

"Major infrastructure projects, including expanding metro networks and ring roads, could accelerate this trend by broadening geographic catchments and improving consumer access," the report said.

(With inputs from TOI)