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Retail real estate sector to surpass 7.5 million sq ft in annual leasing activity

24 December 2025, Mumbai

India’s retail real estate sector has reached a defining milestone, with annual leasing activity projected to surpass 7.5 million sq ft.

This post-pandemic high represents a structural shift in the apparel industry, where international ‘fast-glam’ brands and domestic ethnic-wear giants are aggressively securing prime floor space.

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While e-commerce remains a powerhouse, the physical storefront has been reinvented as a high-conversion brand temple.

This ‘physical-first’ strategy is particularly evident in Tier-I cities, where Grade-A mall vacancies have plummeted to sub-8 per cent levels, driving a rental appreciation of nearly 12 per cent Y-o-Y.

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Fashion hubs drive the Grade-A gold rush

The current leasing boom is fundamentally a fashion-led phenomenon. Apparel and lifestyle brands accounted for over 45 per cent of total absorption this year.

Major international players like Uniqlo and H&M are moving beyond flagship metros into high-growth corridors like Pune and Hyderabad, while domestic behemoths such as Reliance Retail and Trent are fueling a ‘mega-format’ trend.

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These 20,000+ sq ft stores are designed to offer ‘retail-tainment,’ blending digital kiosks with sensory fabric lounges. Real estate analysts note, for every dollar spent on digital ads, brands are now reallocating a significant portion toward high-visibility physical footprints to combat online customer acquisition costs.

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Tier-II expansion and the challenge of premium supply

The roadmap for 2026 suggests a supply-side crunch as the primary hurdle. With demand outstripping the delivery of new premium malls, retailers are pivoting to high-street ‘boutique’ clusters and revitalized heritage zones.

This has catalyzed a retail revolution in Tier-II cities like Chandigarh and Kochi, which saw a 25 per cent growth in leasing volume this quarter alone.

SUSTAINABILITY

‘The challenge isn't the appetite for fashion; it’s the availability of quality shelves,’ says a leading mall developer.

As brands prepare for the 2026 fiscal cycle, the focus is shifting toward ‘pre-commitment\’ leasing in upcoming sustainable, LEED-certified retail parks to align with global ESG mandates.

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Raymond’s Century of Style: Scaling textile legacy through ‘Multi-Format’ fashion growth, operational discipline

24 December 2025, Mumbai

Raymond is marking its 100th anniversary by converting its historic dominance in worsted fabrics into a high-octane retail expansion.

In an interview conducted by The Economic Times, Chairman Gautam Hari Singhania emphasized how the company’s endurance is a product of operational discipline rather than historical sentiment.

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To secure its future, the group has completed a massive structural overhaul, demerging its lifestyle business into a standalone, net debt-free entity.

This move is designed to eliminate the "conglomerate discount," allowing the textile and apparel verticals to pursue specialized growth with absolute financial clarity.

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Corporate restructuring delivers sharp profitability gains

The strategy of unbundling the business is already delivering measurable results. In Q2 FY26, Raymond Lifestyle reported a consolidated revenue of ₹1,865 crore, representing an 8% year-on-year increase.

More significantly, profit after tax surged by 78% to ₹75 crore.

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This growth is underpinned by the "Branded Textile" segment, which contributed ₹937 crore to the top line.

By focusing on high-margin garmenting and a "China Plus One" sourcing strategy, the company is positioning its manufacturing units as a global alternative for premium international brands while simultaneously doubling down on domestic retail presence.

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Wedding wear strategy targets high-margin growth

The company’s growth roadmap is stitched into the booming ethnic wear segment through "Ethnix by Raymond," which aims to capture 7% of the men’s ceremonial market by 2027. Currently operating 1,663 stores, the brand is penetrating deep into Tier 2 and Tier 3 markets. Explaining his philosophy on navigating competitive shifts, Singhania noted during the interview: "A race is not won on straight roads alone; it is often won on the corners."

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By aggressively scaling its physical footprint and prioritizing premiumization, Raymond is ensuring its second century is defined by retail dominance rather than just textile history.

Founded in 1925 as a woolen mill in Maharashtra, Raymond Group has evolved into a diversified global conglomerate with a core focus on textiles and apparel.

Sustainability

The company maintains a presence in over 60 countries and owns a portfolio of high-equity brands including Park Avenue, ColorPlus, and Parx.

Under the leadership of Gautam Singhania, the group has successfully transitioned into a net debt-free lifestyle and real estate player.

With a current roadmap to add 900 new stores by 2028, Raymond remains positioned as a leader in India’s $6 trillion consumer economy, supported by a century of expertise in fabric manufacturing and garmenting.

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