However, Q2 2025 witnessed a 15% quarter-on-quarter dip in leasing due to supply constraints, suggesting that momentum could moderate if new retail space does not come online in time to meet demand.

H1 Retail Leasing Reaches Historic Levels

Retail leasing across India’s top 7 cities—Delhi NCR, Bengaluru, Mumbai, Hyderabad, Pune, Chennai, and Kolkata—reached 5.7 million sq. ft. in H1 2025, up from 3.3 million sq. ft. in H1 2024. The first quarter alone (Jan–Mar 2025) accounted for 3.1 million sq. ft, while Q2 leasing stood at 2.6 million sq. ft.

New mall supply also surged by 165% YoY, with 2.3 million sq. ft of new retail space added in H1 2025, driven by major completions in Mumbai, Hyderabad, and Delhi NCR.

Table 1: Retail Market Performance – H1 2025 vs H1 2024

Source: JLL Research | Top 7 cities

City Trends: Bengaluru and Delhi NCR Lead, Jewellery Surpasses Entertainment

In Q2 2025 alone, Bengaluru and Delhi NCR accounted for 46% of gross leasing. Bengaluru showed high activity in jewellery and home furnishings, while Delhi NCR was dominated by food and beverage (F&B) retailers.

Quote:

“Jewellery emerged as the third leading retail category, overtaking Entertainment for the first time. From a 16% share in Q1 2025, Entertainment fell to 6% in Q2, while Jewellery rose to 9%,”
said Dr. Samantak Das, Chief Economist and Head of Research, JLL India.

Cities like Hyderabad and Mumbai recorded leasing activity around 0.5 million sq. ft each, while Chennai and Kolkata showed a mild quarter-on-quarter rise. Pune remained moderate in comparison.

Table 2: Category-wise Share in Q2 2025 Retail Leasing

Source: JLL Research

International Brands Accelerate Entry; Domestic Brands Still Dominate

While domestic retailers dominated 85% of Q2 leasing, the international share of 15% equated to around 0.4 million sq. ft. Notably, 13 new global brands entered India in Q2 2025 alone, with 7 in the F&B segment.

Quote:

“India’s strategic position for retail expansion is evident. With 13 new global entrants in Q2 alone, it reflects rising global confidence driven by India’s young demographics and evolving consumption,”
said Rahul Arora, Head – Office Leasing & Retail Services, JLL India.

Outlook: 5.9 Million Sq. Ft. of Supply Set for H2 2025

With an additional 5.9 million sq. ft of new retail space scheduled for the second half of 2025, mainly in Delhi NCR, Bengaluru, Hyderabad, and Pune, India is on track to cross the 10 million sq. ft annual leasing mark for the first time.

Table 3: Upcoming Retail Supply in H2 2025 (Select Markets)

Source: JLL Projections

However, the ability of developers to deliver high-quality retail infrastructure on time will be key to sustaining leasing momentum. Delays or mismatches in location and design could limit opportunities for expanding brands.

Conclusion

India’s retail real estate market is scaling new heights with a record-breaking H1 2025 performance. However, the sector now faces the challenge of keeping up with demand through timely supply, as developer and retailer strategies adjust to a changing consumption and investment environment. Both global and local players are betting big on India’s consumer growth—and so far, the numbers support their optimism.

Also Read: Retail Real Estate Booms in India: 169% YoY Growth in Q1 2025 Leasing Activity

The post India’s Retail Leasing Hits Record Growth, But Supply Gaps May Temper Momentum appeared first on Square Feat India.

The biggest fear for any homebuyer in India is that the builder will delay or default. That fear isn’t unfounded—hundreds of projects were delayed or stalled in the last decade due to bad finances, over-leverage, or funding crunches post NBFC crisis and COVID. But this is changing.

Indian real estate is undergoing a silent transformation.

Builders, especially listed ones, have restructured their debt, improved profitability, and regained the trust of banks and investors. What this means for the average homebuyer is simple yet powerful:
Lower risk of delays
More financially sound developers
Better delivery timelines and completion assurance

This report by Colliers India presents strong data-backed evidence that financial discipline is now a defining strength of the sector—and that’s good news for homebuyers.

Credit Confidence: Bank Lending to Real Estate Doubled Since FY21

A key indicator of this transformation is the willingness of banks to lend to the real estate sector again. The loan book for real estate has doubled in four years, growing from ₹17.8 lakh crore in FY 2021 to ₹35.4 lakh crore by FY 2025.

Table 1: Growth in Bank Lending to Real Estate

Source: RBI, Colliers India

Quote:

“The strong financial health of the sector is demonstrated by significantly higher credit rating upgrades and increased exposure from banks. Lenders see real estate as less risky now.”
— Badal Yagnik, CEO, Colliers India

NBFCs Slow, But Not Out

While NBFCs have become cautious since the 2018 crisis, their credit book has still grown in absolute terms.

Table 2: NBFC Lending to Real Estate

Note: Data till September 2024. Includes mid and upper layer NBFCs.

Builders Are Profitable Again — And That Makes Them Safer

The financial discipline isn’t just about debt—it’s about how much profit builders are generating and how much debt they carry.

In FY 2021, only 23% of top 50 listed real estate companies had net profit margins above 10%. By FY 2025, that number had nearly tripled to 62%. Similarly, the share of low-debt companies (debt-to-equity < 0.5) rose from 43% to 62%.

Table 3: Financial Health Metrics – FY 2025 vs FY 2021

Source: Colliers India, based on top 50 listed companies

Quote:

“More than 60% of large real estate players now have a debt-to-equity ratio below 0.5, showing how balance sheets are being cleaned up.”
— Colliers India Report

Credit Ratings Surge: 23:1 Ratio of Upgrades to Downgrades

Perhaps the strongest sign of transformation: credit rating upgrades.

While most sectors have seen a mix of upgrades and downgrades post-COVID, real estate has witnessed a 23:1 ratio of rating upgrades to downgrades in H2 FY 2025 — a signal of revived lender and investor trust.

Table 4: Credit Rating Upgrade/Downgrade Ratio

Source: Leading CRA, Colliers

Real Estate IPO Boom – ₹400 Billion Raised Since 2021

Builders are not just borrowing—they’re also raising money through the equity market. This helps them reduce debt further and increase transparency.

In 2024 alone, 9 real estate IPOs raised ₹138 billion. So far in 2025, 7 IPOs have raised ₹76 billion — showing continued momentum.

Table 5: Real Estate IPO Activity

Note: *Till July 2025

Quote:

“The surge in public listings—across flex spaces, REITs, hospitality, and residential—indicates deepening investor faith in the sector’s long-term fundamentals.”
— Vimal Nadar, Head of Research, Colliers India

What This Means for Homebuyers

More dependable builders — reduced chances of default or delay
Faster project execution due to better cash flow
More options to invest, including via REITs & SM-REITs
Better loan availability, as banks now view real estate as lower risk

What to Watch Out For

Even as the sector matures, homebuyers should be cautious of:

• Interest rate hikes that may affect home loan EMIs
• Unregulated or small developers with poor track records
• Legal clearances and land titles—financial health ≠ regulatory compliance

Conclusion

The Indian real estate sector has emerged as a more disciplined, de-leveraged, and creditworthy industry post-COVID. For homebuyers, this shift means greater trust, lower risk, and wider choice. The message is clear — the sector is safer than it has been in years, but due diligence remains key.

Also Read: FY25 Residential Real Estate Outlook: Demand and Price Growth to Moderate

The post Safer Builders, More Trustworthy Projects: How Financial Discipline is Reshaping Indian Real Estate appeared first on Square Feat India.