India's Retail Leasing Jumps 20% in H1 2026: CBRE Report

Forty percent of every square foot leased for retail in India this year came from one category: fashion and apparel. That single number, buried inside a broader CBRE report, tells you where the country's retail real estate demand is actually concentrated right now, and it isn't in malls chasing footfall for its own sake.

The headline number, and what's really driving it

India's organised retail real estate market posted gross leasing of around 3.9 million sq ft in the first half of 2026, up 20% year-on-year, according to CBRE. That growth held despite inflationary pressure and global uncertainty, which says something about how resilient organised retail demand has become as a category, distinct from broader consumer spending anxiety.

Fashion and apparel led by a wide margin, accounting for roughly 40% of total space absorption, powered by department store expansion, mid-range fashion brands and athleisure retailers moving aggressively into new markets. Food and beverage came next at 14%, followed by entertainment at 9%, with jewellery and homeware and furnishings each contributing around 7%, and consumer electronics rounding out the mix at 6%.

The supply side tells its own story

Only 0.9 million sq ft of new retail space became operational during the entire half-year, and every square foot of it landed in Delhi-NCR. That's a striking concentration. It means every other major Indian market absorbed retail demand entirely within existing stock, with no new supply cushion anywhere else in the country during this period.

That combination, rising leasing demand against essentially flat new supply outside one city, is exactly the kind of imbalance that tends to firm up rents in existing Grade A retail assets over the following quarters.

Tier-2 cities are where the real growth story is

Fashion and apparel retailers pushed hard beyond the metros. In Chandigarh and Jaipur, the category accounted for roughly 69% of leasing activity, and in Kochi, around 65%. Those aren't small percentages in secondary markets; they're a signal that brands are treating tier-2 cities as genuine expansion priorities rather than opportunistic add-ons once metro saturation sets in.

Domestic retailers contributed more than 70% of total leasing activity, while direct-to-consumer brands accounted for around 28%, a meaningful share for a category that barely existed as a physical retail force five years ago. D2C brands moving from digital-only into physical leasing is itself a data point worth tracking, since it reflects genuine confidence in offline retail economics rather than a hedge.

What the infrastructure pipeline adds to this

CBRE's report also flagged upcoming Grade A developments and infrastructure projects, metro expansions and ring roads among them, as factors expected to improve connectivity and widen consumer catchment areas going forward. That's a familiar pattern by now: infrastructure investment expanding a retail corridor's addressable customer base before the retail supply itself catches up, exactly the dynamic that's played out around projects like GMLR and Metro Line 11 elsewhere in this desk's coverage.

What this means for the retail real estate pipeline

The report projects sustained institutional investment in organised retail, with shopping malls increasingly shifting toward experience-led and mixed-use formats rather than pure transactional retail. That shift matches what fashion, F&B and entertainment leasing already suggest: Indian consumers, especially in tier-2 markets, are choosing destinations that combine shopping with experience, not just square footage stocked with inventory. For developers and landlords, the message from this half-year's data is fairly direct. The demand is real, broad-based and increasingly spreading beyond the metros, but the supply pipeline outside Delhi-NCR needs to catch up before that demand starts pricing itself out of reach.