Leasing of retail spaces in malls, high streets up 15% this year

Leasing of retail space in shopping malls and high streets across India’s top eight cities is estimated to rise 15 per cent to nearly 9 million sq ft this year on increased supply amid high demand from retailers, according to Cushman & Wakefield.

Photograph: Danish Siddiqui/Reuters

The leasing of retail spaces stood at 7.8 million sq ft in 2024.

Real estate consultant Cushman & Wakefield on Tuesday released the data of retail demand across eight cities — Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, Pune, Hyderabad, and Ahmedabad.

The leasing of retail spaces in high-street locations of these eight cities is estimated to increase to 5.4 million sq ft this year from 5.3 million sq ft in 2024 calendar year.

The demand of retail spaces in shopping malls increased to 3.8 million sq ft from 2.5 million sq ft during the period under review.

The consultant noted that 2025 would see the highest annual absorption of retail spaces since the Covid pandemic that hit India in 2020.

India’s retail real estate market is set to record its highest leasing activity since the pandemic, reaching nearly 9 million sq ft in 2025, driven by a strong year-end surge as new mall supply becomes operational in Q4 (October-December quarter),” said Gautam Saraf, Executive Managing Director, Mumbai & New Business, Cushman & Wakefield.

He noted that next year would also see a strong supply of retail spaces.

“This supply expansion is closely aligned with a clear trend of premiumisation, as consumer preferences continue to shift towards experience-led retail and malls evolve into lifestyle destinations anchored by curated formats and premium brands,” Saraf said.

After a constrained 2024, when Grade A mall completions were limited to 0.9 million sq ft area, new deliveries in 2025 are projected to close around 4.3 million sq ft, the consultant said.

Commenting on the trend, S K Sayal, MD & CEO of Bharti Real Estate, attributed the high demand of retail spaces to strong fundamentals such as rising consumer confidence, evolving lifestyles, and the growth of experience-led formats.

In Delhi-NCR, he said there is a growing preference for mixed-use marquee spaces that seamlessly blend retail, F&B, entertainment, and modern workspaces.

“Urban infrastructure and connectivity continue to play a critical role in enhancing the appeal of retail destinations, as consumers increasingly seek integrated experiences over transactional visits,” Sayal said.

Ashish Sharma, AVP Operations of Brahma Group, said this indicates India’s strengthening consumption-led growth.

“Delhi-NCR is expected to remain a key contributor, driven by robust demand from domestic and international brands, improving infrastructure, and rising consumer spending across organised retail formats,” he added.

Shriram PM Monga, co-founder of SRED Real Estate Advisory, noted that the retail space leasing in 2025 has been marked by sustained momentum, led by fashion, F&B, and digitally native brands expanding their physical footprint.

“This demand is playing out against a backdrop of limited Grade-A mall supply and renewed preference for high-visibility high streets,” he added.

Looking ahead to 2026, Monga said the leasing activity would intensify further, particularly across tier-2 cities.

Cushman & Wakefield has projected that the demand for retail spaces might rise at 10-11 million sq ft in 2026.