India’s Retail Boom: A Golden Era for Commercial Realty Investments

New Delhi, March 10, 2025: India’s retail sector, currently valued at INR 82 lakh crore, is expected to more than double and reach over INR 190 lakh crore by 2034, according to a recent report by the Boston Consulting Group (BCG) and the Retailers Association of India (RAI). The report also highlighted how economic dynamism, digital adoption, and transforming consumer preferences are reshaping the industry and fuelling unprecedented demand for commercial real estate.

Retail Growth Meets Realty Demand

This growth is inextricably linked to commercial real estate. As brands expand their footprint—both online and offline—the demand for premium retail spaces, warehouses, and experiential hubs is skyrocketing. Nowhere is this synergy more evident than in Delhi-NCR, where retail leasing activity jumped 36 per cent YoY in 2024, driven by high streets like Galleria Market (Gurugram) and Khan Market (Delhi), which saw rents climb by 20 per cent and 7-10 per cent, respectively.

Salil Kumar, Director-Marketing & Business Management of CRC Group, says, “The demand for premium retail spaces in Delhi-NCR is unlike anything we’ve seen before. With consumers becoming more selective about their shopping experiences, developers are focused on mixed-use projects that combine retail, office, and entertainment spaces to meet these demands. Our company is aligned with the changing expectations. Therefore, we’ve chalked a strategy and are coming up with projects in high-traffic areas as these offer long-term sustainability for both investors and tenants.’’

Fuelling India’s retail boom is its unique demography, where tech-savvy Gen Z co-exist with the ageing population, due to which a price-sensitive market thrives in parallel with a class seeking premium offerings and is pivotal in shaping Delhi-NCR’s retail landscape.

“Evolving exponentially from the pre-Covid era the retail segment in India has been totally transformed. As we are on the path to becoming the third biggest economy, there is an increasing interest among international brands willing to set up their shops in India. Domestic brands are also capitalising on this economic growth. At the same time, the customer’s demands are high and are being met with premiumisation and refinement. They need the products of superior quality and are ready to shell out the extra bucks for it too. The key to success in this market lies in understanding where consumer traffic is headed and making sure developments are strategically executed for maximum impact,” says Ambience Group Director Arjun Gehlot.

Gurugram: The Epicenter of Retail Realty

Gurugram leads the region, with mall vacancies plunging to 3 per cent in premium areas and leasing activity dominated by high streets (59 per cent in Q4 2024). The tightening supply is another critical factor. Mall vacancies dropped to 12.52 per cent by end-2024, marking a three-percentage-point annual decline. However, malls in high-net-worth-neighbourhood reported near-full occupancy at around 3 per cent vacancy rates, signifying retailer preference for high-footfall locations. It led to the popularity of strategic locations like the Southern Peripheral Road (SPR) and Dwarka Expressway—corridors now buzzing with integrated office-retail-entertainment hubs.

Sandeep Chhillar, Founder and Chairman, Landmark Group, “The future of retail real estate in Delhi-NCR is undoubtedly tied to its infrastructure development. As new corridors like Dwarka Expressway and SPR open up, they are becoming essential for retailers looking to expand into untapped markets. Besides, as demand for premium retail developments rises, so does leasing activity, with Gurugram emerging as the frontrunner in this growth story. Developers are also actively planning and coming up with new projects to cater to this surge, ensuring that retail spaces are not only well-located but also aligned with evolving consumer expectations. Thus, we believe this momentum will redefine Gurugram’s retail landscape, making it a key destination for commercial real estate expansion.”

With 27 global entrants in 2024 alone, international brands are flocking into the region as well. The region’s large consumer base, connectivity, and Grade-A infrastructure make it a magnet for retailers and investors. The influx of luxury fashion, F&B, and D2C brands (which contributed 8 per cent to national leasing) underscores the shift toward experiential retail.

Prakash Mehta, Chairman and Managing Director, Ocus Group, says, “The retail real estate market in Delhi-NCR is witnessing unprecedented growth. Leasing activity has witnessed 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. All these developments augur well for the commercial realty segment,”

For developers, the focus is on strategic location and experiential design. Investors are doubling down on high streets and mixed-use assets, while retailers must align with hybrid consumer preferences. As the BCG-RAI report notes, businesses that integrate aspiration with affordability will shape the future. With retail realty moving towards a decade of double-digit growth, the message is clear: it is the time to make commercial space an intrinsic part of the real estate investment portfolio.