India Commercial and Retail Real Estate: 2025 Review, 2026 Outlook

2025 emerged as a defining year for India’s commercial and retail real estate, blending steady growth with strategic consolidation. Across metros and emerging business districts, strong leasing activity in Grade A office spaces and premium retail hubs reflected a renewed sense of confidence among businesses and investors.

Developers were taking a long-term view, prioritizing quality, regulatory compliance, and enduring asset value over sheer scale. The market showed a subtle but significant shift: moving away from rapid, quantity-driven expansion toward thoughtful, sustainable, and future-ready developments that are poised to meet evolving business and consumer needs.

India’s retail real estate market continued its upward trajectory in Q3 2025, with gross leasing across the country’s top seven cities reaching 3.2 million sq. ft, representing a remarkable 65% year-on-year increase, according to JLL. This growth was driven by a mix of fresh supply in key markets, steady expansion by domestic retailers, and broad-based activity across multiple categories, from apparel and food & beverage to daily needs and luxury brands.

The July–September quarter proved pivotal for the sector, as developers delivered new, investment-grade retail spaces in markets that had previously faced supply constraints. Delhi NCR and Hyderabad emerged as the frontrunners, together accounting for 57% of national leasing activity, highlighting how new mall openings and revitalized high streets are shaping retail expansion strategies.

A standout trend of Q3 2025 was the dominance of domestic retailers, who made up 81% of gross leasing, with indigenous brands occupying 2.6 million sq. ft, a 76% increase compared to Q3 2024. Foreign brands, meanwhile, contributed 19% of activity.

Fashion and apparel led the leasing charts with a 35% share, followed by food & beverage at 16%, and daily needs and grocery at 11%. Notably, daily needs categories saw heightened demand as retailers increasingly positioned themselves as anchor tenants in premium retail developments, signaling both confidence in the market and a shift toward community-centric, experiential retail offerings.

Also Read: 2025 Real Estate Wrap-Up: Growth Momentum Sets Stage for 2026

Meanwhile, India’s office market continued its strong performance in the third quarter of 2025, marking the sixth consecutive quarter with over 20 MSF of gross leasing volume (GLV). Despite global uncertainties, including US tariff and visa policy changes, the market remained resilient, driven by robust occupier confidence and expansion by both domestic and global firms. Delhi NCR led pan-India GLV in Q3, accounting for 22% share, followed by Bengaluru and Mumbai 

with 20% each, followed by Chennai with a 13% share. IT-BPM accounted for the highest share (31%) in quarterly leasing, followed by engineering & manufacturing and BFSI with 18% and 14% shares, respectively. Flex operators accounted for 11% of quarterly GLV.

Besides, 2025 witnessed a strong resurgence in office leasing, particularly across Grade A spaces in established metros and emerging business districts. Demand was led by IT/ITeS firms, Global Capability Centers, BFSI players, consulting firms, and digital-first companies, with GCCs emerging as the largest space taker, signaling India’s growing stature as a global outsourcing and innovation hub. Developers responded with modern, tech-enabled workplaces, integrating wellness features, sustainability certifications such as LEED and IGBC, and hybrid-ready infrastructure to cater to evolving work models.

Beyond the established metros, 2025 saw Tier 2 and emerging cities like Indore, Jaipur, Lucknow, Kochi, and Chandigarh increasingly capturing investor and developer attention. Growth in these markets has been fueled by improved infrastructure and connectivity, from new expressways and metro expansions to smart city initiatives, combined with more affordable land and leasing costs compared to Tier 1 cities. As a result, office parks, mixed-use developments, and retail hubs in these cities are becoming strategically significant, investment-worthy destinations in their own right.

Therefore, reflecting on 2025, India’s commercial and retail real estate demonstrated not just consistent demand but a clear shift toward quality-led, future-ready development that meets evolving business and consumer expectations. Looking ahead to 2026, the sector is set for strategic, measured growth, blending modern infrastructure, sustainability, and experiential design that goes beyond transactions to create meaningful spaces.