Authored by – Ashwani Kumar, Pyramid Infratech
The retail real estate market in Delhi-NCR is witnessing unprecedented growth. Leasing activity has seen record-breaking numbers, and not only domestic investors but international brands as well are increasingly leasing spaces in strategically located premium commercial retail spaces. In NCR, Gurugram is at the forefront of this retail revolution.
Rise in Leasing and Demand for Prime Retail Spaces
As per JLL, Delhi-NCR’s retail leasing activity saw a remarkable 36% year-on-year (YoY) increase in 2024, with 59% of Q4 leasing concentrated in main streets. High streets such as Galleria Market (Gurugram) and Khan Market (Delhi) have experienced rental growth of 20% YoY and 7-10% YoY, respectively, reflecting heightened demand for quality retail spaces.
The tightening supply is another critical factor. Mall vacancies dropped to 12.52% by end-2024, marking a three-percentage-point annual decline. However, malls located in high-net-worth neighbourhoods reported near-full occupancy at around 3% vacancy rates, signifying retailer preference for high-footfall locations. Notably, 2024 saw no new mall completions, further intensifying competition for premium spaces.
Changing Consumer Behavior and Omnichannel Retailing
The shift in consumer spending patterns and the rise of omnichannel retailing are pivotal in shaping Delhi-NCR’s retail landscape. Despite the e-commerce boom, physical retail remains indispensable, with Direct-to-Consumer (D2C) brands contributing 8% to national leasing in 2024. Retailers are adopting hybrid strategies, using brick-and-mortar stores to enhance brand presence and consumer engagement.
Key retail segments witnessing growth include fashion (+5% YoY) and furniture & furnishings (+38% YoY). The food & beverage (F&B) and hypermarket segments have faced contractions, but premium lifestyle and experiential retail concepts continue to gain traction.
Rise of Mixed-Use Developments and Emerging Retail Corridors
Gurugram continues to be at the head of NCR’s retail investments, with integrated office-retail-entertainment hubs attracting both retailers and consumers. New corridors such as Southern Peripheral Road (SPR) and Dwarka Expressway are witnessing quality developments, enhancing connectivity and boosting retail attractiveness.
International Brand Influx and Investment Confidence
Delhi-NCR remains a top choice for global brands expanding into India. In 2024 alone, 27 international brands entered the country, targeting high-consumption markets like Delhi-NCR. The influx of foreign brands, especially in fashion, accessories, and F&B, is further propelling demand for premium retail spaces.
Developers and investors are responding to this demand by focusing on Grade-A retail properties. With Delhi-NCR accounting for 14% of India’s total retail leasing activity, the region’s dominance in the retail sector is set to continue.
A Market Poised for Sustained Growth
The retail boom in Delhi-NCR reflects a broader shift towards high-quality, experiential retail spaces. Declining vacancies, rising rentals, and upcoming supply are indicative of the market’s long-term growth. For stakeholders, the message is clear: the focus should be primarily on high streets and premium malls. For retailers, it is sine quo non for them to align with consumer demand for hybrid shopping experiences. As far as developers are concerned strategically location is the key for high occupancy and sustained demand.
