Delhi retail rents to increase by up to 1-2% by end-2026

Rents grew by 3.9% in Q2 alone.

Delhi's retail market recorded a strong second quarter, with gross leasing volume rising 37% quarter on quarter to 0.89 million sq ft, according to JLL.

The Suburbs accounted for 57% of leasing, followed by Prime Others with 32%, while net absorption reached a healthy 0.49 million sq ft. JLL said absorption was supported by new store openings at recently operational malls.

Malls accounted for more than 79% of total leasing activity. Food and beverage retailers led demand with a 32% share, followed by entertainment at 19% and fashion and apparel at 17%.

Two new malls were completed during the quarter, adding 0.45 million sq ft to the market: City Centre II, with 0.20 million sq ft in Prime Others, and ATS Khyber Range, with 0.25 million sq ft in the Suburbs in Ghaziabad. Total retail stock consequently reached 29.0 million sq ft. A further 0.73 million sq ft of retail space is expected to be delivered in the Suburbs in the third quarter.

Despite the new supply, vacancy fell 35 basis points quarter on quarter to 12.4%, reflecting healthy retailer demand at recently opened malls, JLL said.

Rental values increased 0.3% quarter on quarter and 3.9% year on year in Q2, while capital values rose 1.2% quarter on quarter and 5.7% year on year. Prime South recorded the strongest quarterly rental growth, at 0.8%, as demand for premium retail space remained firm in the absence of new supply. The Suburbs and Prime Others recorded more modest increases of 10 to 50 basis points.

JLL expects leasing activity to remain healthy through the rest of 2026, supported by expansion plans from major retail chains and new store openings in upcoming malls. Rents are forecast to rise by 1% to 2% by year-end, while capital values are expected to increase and yields could compress by 10 to 15 basis points, according to the consultancy.