India’s retail sector continues to be on a growth trajectory

India’s retail sector continues to be on a growth trajectory underscored by steady demand from retailers.

In Q3, India’s top seven cities witnessed 3.2 million sq. ft of gross leasing, indicative of a substantial 65% Year-on-Year (Y-o-Y) growth.

During Q3 2025, Delhi NCR comprised 35% of the total gross leasing volume, led by marked retail space take-up in two newly constructed malls. With the third quarter leasing, the 9-monthly gross leasing total for 2025 stood at 8.9 million sq. ft. This is a remarkable landmark for India’s retail sector as this 9-monthly leasing total for 2025 represents 110% of 2024’s annual gross leasing total, according to JLL survey.

On Q-o-Q basis, Q3 gross leasing volume reflects a 22% growth.

With total new supply infusion of 1.5 million sq. ft in Delhi NCR and Hyderabad, retailers that were waiting for expanding footprint due to supply constraints in the past, were finally able to move ahead with new store openings in key micro markets. Interestingly, both shopping malls and high streets have been at the forefront of new leasing momentum, and this quarter witnessed 53% and 41% share of leasing in these formats, respectively.

Across the top seven cities, Delhi NCR and Hyderabad led the gross leasing momentum in Q3 2025. Delhi NCR (35%) and Hyderabad (12%) emerged as clear market leaders in the city tally as demand for retail leasing in these markets increased significantly compared to the previous quarters. While shopping malls comprised lion’s share in gross leasing in Delhi NCR, high streets garnered immense interest for expansion by retailers in Hyderabad.

“During the July-September quarter, fashion and apparel (35%), food & beverage (16%), and daily needs and grocery (11%) sustained robust leasing momentum for retail space absorption. The Q3 saw heightened demand from daily needs and grocery retailers, who typically require substantial space allocations and frequently serve as anchor tenants in premium retail developments. Direct-to-consumer (D2C) brands have been making significant investments in their click-and-mortar strategies, progressively expanding their physical store presence across various retail formats, particularly in fashion and apparel, jewellery and beauty, and cosmetics and wellness categories. Looking ahead, D2C brands are positioned to capture an increasingly larger portion of the overall gross leasing activity,” said Dr. Samantak Das, Chief Economist and Head of Research & REIS, India, JLL.

“The strong presence of domestic retailers in retail space demand continues unabated, with indigenous brands leasing 2.6 million sq. ft in Q3 2025, representing a 76% Year-on -Year increase compared to Q3 2024. Foreign brands accounted for a 19% share of leasing activity this quarter. During the nine-month period from January to September 2025, luxury retailers leased 0.2 million sq. ft of retail space, marking a 19% increase over the corresponding period in the previous year,” said Rahul Arora, Head - Office Leasing & Retail Services, Senior Managing Director (Karnataka, Kerala), India, JLL.

With an eight-quarter rolling average of 2 to 2.5 million sq. ft of gross leasing observed over the past year, the retail sector is well positioned to achieve gross leasing totals in the range of 10.5 to 11.5 million sq. ft by the end of 2025. Combined with a robust development pipeline of nearly 4.7 million sq. ft of new retail assets scheduled for the final quarter of this calendar year, overall leasing activity in India is expected to exceed previous estimates of approximately 10 million sq. ft. Based on current supply projections, nearly 37 million sq. ft of new mall supply may become operational across the top seven cities by 2029.

A group of NRIs are planning to invest real estate development. What would be the ideal entity option to minimise tax liability in India? Avinash Rana, Sharjah.

Investment in property can be made in the names of two or more family members. For joint purchase, the co-owners’ investment should be in proportion with their ownership in the property. As regards including minors, even if investment is made in property in the name of minor children the income arising therefrom will be clubbed with the income of the father or mother who has higher income.

There should be clarity while demarcating the property if investment is made in a joint property between two or more family members. This will avoid future disputes and tax litigation.

I have inherited ancestral property in India. Can I gift it to my relative? Are there restrictions? Deepak Tilsani, Dubai.

If it is ancestral property, heirs get the right by birth, depending on the religion they belong to in India. The property can be passed on by reorganisation, by way of family settlement or a division in case of a HUF (Hindu Undivided Family). If you wish to gift your share from ancestral property, you can do it without any restrictions as it is like your self-earned property.