Sunday, 8 March 2026
India’s retail property market entered 2026 with a somewhat unusual dynamic. While consumer spending often slows after the country’s intense year-end festival season, leasing activity in shopping centres and high streets has remained resilient. Retailers appear to be using the early months of the year to advance store expansion plans, suggesting that momentum in the physical retail sector continues despite a seasonal pause in household spending.
The closing months of 2025 delivered exceptionally strong retail performance across India. Industry associations reported that festive-season sales reached approximately ₹5.4 trillion in goods alongside roughly ₹650 billion in services, reflecting a sharp increase compared with the previous year. Surveys conducted among traders across major commercial hubs indicated that a clear majority experienced stronger demand during the period, reinforcing the importance of festival-driven consumption in the Indian economy. Categories such as apparel, electronics and household goods were among the largest beneficiaries of the surge in spending.
Strong consumer demand during the festive months has helped reinforce confidence among retailers and landlords alike. Property advisory research indicates that retail leasing activity across major Indian cities reached about 8.9 million square feet in 2025, marking one of the strongest years on record for the sector and surpassing the level recorded in 2024. The increase reflects a combination of domestic brands expanding their store networks and international retailers continuing to enter or grow within the Indian market.
While consumer spending traditionally moderates in January as households recalibrate budgets after the festival period, the shift does not appear to have disrupted retailers’ long-term strategies. Instead, the beginning of the year often represents a transitional phase in which brands evaluate performance from the previous quarter and prepare for new store openings planned later in the year. Retail expansion decisions are also supported by relatively stable price conditions and the continued growth of India’s middle-class consumer base.
Another factor sustaining leasing activity is the steady development pipeline of modern retail space. Developers continue to deliver new shopping centres and upgrade existing malls in major metropolitan areas including Delhi-NCR, Mumbai, Bengaluru and Hyderabad. Industry analysts estimate that several million square feet of high-quality retail space is expected to enter the market in the coming years, creating additional opportunities for retailers seeking prime locations.
At the same time, demand is gradually spreading beyond the largest cities. Retailers are increasingly targeting Tier-2 and Tier-3 markets where rising disposable incomes and improved infrastructure are supporting stronger consumer spending. In many of these cities, organised retail formats remain underrepresented, offering brands an opportunity to establish early market presence while benefiting from lower occupancy costs compared with prime metropolitan districts.
Seasonal factors also play a role in sustaining demand after the festive quarter. India’s wedding season, which often extends into the early months of the year, continues to generate spending across fashion, jewellery, beauty and home-related categories. This additional consumption cycle helps maintain footfall in shopping centres even as the broader post-holiday slowdown takes effect.
Looking ahead, industry research suggests that leasing activity could remain robust in 2026 as retailers continue to expand their physical footprints. Despite the rapid growth of e-commerce, brands increasingly view physical stores as a key component of omnichannel strategies, enabling customer engagement, brand visibility and fulfilment capabilities. As a result, the early-year moderation in consumer spending may represent less of a downturn and more of a brief adjustment before the next phase of retail expansion gathers pace.
In that context, the January slowdown in spending does not necessarily signal a weakening retail market. Instead, it appears to mark a shift in the composition of demand, with retailers continuing to secure space in anticipation of future growth in India’s rapidly evolving consumer economy.
Source: CIJ.World India Research & Analysis Team
