India retail leasing rises 10.5% to four-year H1 high despite mall-supply crunch
Organised retail leasing reached 6.27 million sq ft in H1 2026 as domestic retailers drove 79.1% of demand. Fresh mall supply fell 64% year on year, tightening vacancies, while Mumbai, Delhi NCR and Bengaluru accounted for 76% of leasing.
What happened
JLL India · India’s organised retail leasing hit a four-year half-year high in H1 2026 despite a sharp decline in new mall supply. Domestic brands drove demand,
Key facts
- Gross leasing reached 6.27 million sq ft in H1 2026, up 10.5% YoY from 5.68 million sq ft
- Fresh mall supply declined 64% YoY
- Domestic retailers accounted for 79.1% of leasing
- Shopping mall leasing rose 22.4% YoY
- Malls' share of gross leasing increased to 43.1% from 38.9%
- Mall vacancy fell 45 basis points to 11.15% from 11.60%
- Mumbai, Delhi NCR and Bengaluru contributed 29%, 24% and 23% of leasing, respectively
- Kolkata leasing rose 87.3% YoY; Delhi NCR 75.9%; Mumbai 69.6%
Why this matters
Expansion teams should secure sites early or pursue alternative formats, as constrained mall inventory is concentrating competition in India’s three largest leasing markets.
What to watch
- Quarterly mall completions and under-construction pipeline in Mumbai, Delhi NCR and Bengaluru.
- Prime mall asking-rent growth, lease renewal spreads, revenue-share terms and rent-free-period trends.
- Vacancy movement below 10% and evidence of waitlists for premium mall space.
- Leasing mix between domestic retailers, international entrants, F&B, beauty, athleisure and entertainment tenants.
- Retailer store opening guidance, same-store sales growth and reported occupancy-cost-to-sales ratios.
- Financing costs, construction inflation, land availability and regulatory approvals affecting future mall starts.
- Prioritise renewals and pre-emptive lease extensions at productive flagship stores before market rent resets.
- Use portfolio-level negotiations to trade longer commitments or multi-city expansion for capped escalations, fit-out support and exclusivity clauses.
- Reallocate new-store pipelines toward high streets, mixed-use assets and underserved Tier 2/3 catchments where occupancy costs are lower.
- Tighten store-level return thresholds as rent-to-sales ratios rise; favour smaller footprints, shop-in-shops and omnichannel fulfilment-enabled locations.
- Landlords should accelerate redevelopment, asset extensions and tenant-mix upgrades rather than rely solely on headline rent increases.