On behalf of Azad Ahmad Lone, President, Business Development and Operations, Biigtech

Once seen as the most cyclical segment of commercial real estate, retail assets are now powerfully reclaiming investor attention. For years, capital remained cautious, wary of fluctuating footfalls and shifting consumer behaviour. That perception, however, is changing. Today, investors are placing greater emphasis on income certainty, leasing visibility, and an asset’s ability to deliver stable cash flows, rather than betting purely on capital appreciation. Well-leased retail developments with strong tenant profiles and predictable rentals are increasingly being viewed as robust, income-generating assets. This shift reflects a broader recalibration in investment strategy, where operational performance and annuity-style returns are emerging as key drivers of confidence in India’s retail real estate market.

This renewed confidence is closely tied to the growing importance of leasing strength in determining asset value. Investors today are scrutinising brand-led tenant mixes, longer lock-in periods, and consistently low vacancy levels, viewing them as indicators of income durability rather than short-term leasing success. The focus has shifted from headline occupancy numbers to the quality of occupiers and their ability to sustain rentals over the long term. In response, developers are becoming far more deliberate in curating tenant profiles, prioritising established brands and complementary uses that enhance footfall and reduce income volatility. Value creation, industry watchers note, is increasingly beginning well before project completion, with leasing strategy now central to how retail assets are priced and perceived.

According to Cushman & Wakefield, retail leasing in Delhi NCR stood at 1.03 msf in Q4 2025, marking a 100% quarter-on-quarter increase and a 4.5-times rise year-on-year. Leasing growth was primarily driven by two newly opened malls, with Noida contributing 15% of the total activity. Of the 0.6 msf of leasing recorded in malls, around 0.4 msf was fresh space take-up, while the remainder comprised churn and renewals. Fashion-led categories accounted for the largest share of space take-up in Q4 2025 at 25%, followed by department stores (22%) and F&B (13%). These experience-led segments support stronger store-level performance, enabling tenants to sustain sales-linked rentals and absorb periodic market fluctuations more effectively. For asset owners, this translates into longer lease tenures, lower churn, and improved rental visibility. As a result, footfall resilience is increasingly being seen as a direct contributor to income stability, reinforcing the appeal of well-designed retail assets among long-term investors.

At the same time, investor interest is widening beyond traditional metro markets, with Tier-2 cities emerging as the next growth frontier for organised retail. These markets are witnessing a steady rise in consumption, supported by improving incomes, urbanisation, and the entry of national and regional brands. For investors, organised retail assets in such cities offer more attractive yield spreads, relatively lower development and acquisition costs, and the potential for sustained demand growth. Developers with an early-mover strategy are also increasingly shaping these retail ecosystems, creating structured formats in markets that were earlier dominated by unorganised high streets.

The return of institutional capital is further reshaping how retail assets are planned and executed. With investors increasingly applying REIT-style evaluation frameworks, retail developments are now being assessed through the lens of cash-flow visibility, asset management capability, and operational transparency. This shift is influencing everything from design and tenant mix to lease structuring and post-completion management. It underscores a broader transition, with retail firmly entering the institutional-grade asset universe and being positioned as a core component of diversified commercial portfolios.

Alongside this evolution, leasing performance is increasingly outweighing location as the primary driver of value. Market participants note that a well-leased retail asset in an emerging micro-market can often outperform a poorly occupied development in a traditionally prime location. Leasing metrics such as tenant quality, lease tenures, and rental visibility are now influencing asset valuations, financing terms, and exit options more decisively than address alone. This has also pushed developers to adopt a more active asset-management approach post-completion, focusing on tenant retention and performance optimisation.

Taken together, the renewed investor interest in retail is less a function of sentiment and more a reflection of measurable execution on the ground. Disciplined leasing strategies, experience-led design, and a clear focus on income visibility are reshaping how retail assets are built, managed, and valued. As developers align more closely with institutional expectations and long-term performance benchmarks, retail is steadily shedding its earlier cyclical tag.