India's Retail Real Estate Leasing Set to Reach 2025 High: Cushman & Wakefield Report
New Delhi
India's retail real estate market is poised to close 2025 on a strong note, with leasing activity expected to reach nearly 9 million square feet (MSF), marking the highest annual absorption since the pandemic, according to a new report by real estate services firm Cushman & Wakefield.
The projected figure represents a significant jump from approximately 7.8 MSF recorded in 2024. The surge in leasing is being driven largely by a revival in mall-led absorption, supported by the completion of new Grade A retail assets in key markets during the final quarter of the year, the global commercial real estate services firm said in a report on Tuesday.
While high-street locations continued to attract steady demand amid earlier supply constraints, the availability of quality mall space has helped unlock expansion plans that had remained on hold over the past two years, it said. Fashion, food and beverage, and entertainment categories remain the primary demand drivers.
Supply conditions have also improved materially. After a subdued 2024, when Grade A mall completions were limited to about 0.9 MSF, new mall supply in 2025 is expected to reach roughly 4.3 MSF. Although this does not fully offset the supply shortfall accumulated in recent years, it has been sufficient to ease constraints and enable higher leasing volumes.
Looking ahead, Cushman & Wakefield projects retail leasing demand to strengthen further in 2026, with absorption estimated at 10-11 MSF. The upcoming supply pipeline stands at around 5.9 MSF, of which nearly three-quarters is expected to comprise Grade A+ malls. These high-quality assets are set to come across major cities including Bengaluru, Chennai, Mumbai, and Hyderabad, improving choice for retailers and supporting sustained expansion.
While mall rentals may stabilise in markets witnessing heavier supply, premium Grade A+ malls and dominant high-street corridors are expected to maintain rental momentum. New store openings and re-leasing activity in top-performing assets could continue to set higher rental benchmarks amid persistent demand-supply imbalances.
The report also highlighted a growing trend of premiumisation in India's retail sector, driven by global brand rollouts, platform-led partnerships, and a gradual expansion of organised retail into select Tier II cities.
