Mumbai, August 4, 2026: Gross leasing in India’s retail sector climbed 10.5% year-on-year to 6.27 million sq. ft. in the first half of 2026, up from 5.68 million sq. ft. in the same period last year, according to data released by JLL. The growth comes despite limited new supply and ongoing external challenges, marking the highest half-yearly leasing volume for the sector in the past four years.
Mumbai, Delhi NCR, and Bengaluru together accounted for more than 75% of total leasing activity, with Mumbai contributing 29%, Delhi NCR 24%, and Bengaluru 23%. The overall shopping mall vacancy rate across the top seven cities declined by 45 basis points year-on-year to 11.15% at the end of H1 2026, reflecting sustained occupier demand.
Domestic retailers and sector trends
Domestic retailers drove the market, accounting for 79.1% of total gross leasing during the period. The fashion and apparel segment remained the largest contributor with a 33% share, followed by food and beverage at 18%, and entertainment at 16%. The entertainment segment saw its share rise from 12% in H1 2025 to 16% in H1 2026, supported by a 41.5% year-on-year increase in space take-up, particularly by family entertainment centres such as bowling alleys, gaming zones, and children’s play areas.
In contrast, the daily needs and grocery segment experienced a 39% drop in leasing volume, attributed to the rapid growth of quick commerce and dark store networks. The entry of new international brands slowed, but established international retailers continued to expand, with their gross leasing rising 62.1% year-on-year. New international entrants were mainly in food and beverage, fashion and apparel, footwear, and bags and accessories.
Supply constraints and development pipeline
New shopping mall supply in H1 2026 totalled 0.82 million sq. ft., a 64% decline from H1 2025. The total shopping mall stock in India now stands at approximately 92.08 million sq. ft. Despite the limited supply, demand for organised retail spaces strengthened, with malls increasing their share of overall gross leasing from 38.9% in H1 2025 to 43.1% in H1 2026. Leasing volume in shopping malls grew 22.4% year-on-year.
JLL reported that about 45.5 million sq. ft. of shopping mall space is under construction across the top seven cities—Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai, and Pune—and is expected to become operational by 2030. Kolkata emerged as a growth market with leasing volumes surging 87.3% year-on-year after a new mall opened in Q1 2026. Delhi NCR and Mumbai also posted strong leasing growth of 75.9% and 69.6%, respectively, while Bengaluru, Hyderabad, and Chennai saw moderation in activity.
Market outlook and expert view
“India’s retail real estate sector is in a resilient growth phase, where demand is surging to record levels, reinforcing the sector’s position as a key driver in the economy. Despite global headwinds and a sequential rise in retail inflation between January and June 2026, gross leasing volume across the top seven markets reached 6.27 million sq. ft. in H1 2026, the highest half-yearly leasing activity recorded in four years,” said Saket Amrit, Head-Retail Services, India, JLL.
Amrit added that with the total shopping mall stock at approximately 92 million sq. ft. and a robust development pipeline of over 45 million sq. ft. expected by 2030, the sector is positioned for sustainable, institutionally backed expansion, driven by strong domestic consumption and retailer expansion plans.
Organised retail sector outlook
JLL noted that the real estate sector remains well positioned for growth in organised retail, with developers continuing to prioritise quality shopping mall infrastructure to attract institutional investment. The data was sourced from JLL’s Real Estate Intelligence Service (REIS) and covers gross leasing in shopping malls, high streets, and prime retail developments.
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