The retail real estate market in India will see a phenomenal growth of 9 million square feet (MSF) of leasing business in 2025, the highest level of leasing business in India in more than fifty years, as a result of high levels of retailer activity, new Grade-A mall supply, and changing consumer preferences towards experiential business space. This comeback underlines the fact that India is becoming stronger on the commercial property market, and the confidence of both brands and investors is increasing.
As reported in the Cushman & Wakefield India Outlook 2026 report, the retail leasing in the top cities of India in 2025 will be 9 MSF, which is projected to increase to 7.8 MSF in 2024. To a large extent this uplift is credited to new mall completions which were made operational in the last quarter of the year and this created pent-up demand which was awaiting good space to be made available.
Absorption of Retail Space Spurred by a New Supply
This has been facilitated by a growth in the quality retail stock which has facilitated the increment in leasing activity. Although Grade-A malls were relatively slow in 2024 with just about 0.9 MSF of their rollout, the second half of 2025 is set to experience massive rollouts of new retail projects in millions of square feet. These new extensions created a spur to the retailers who had been delayed in expansion by lack of space.
According to retail consultants, the mall and high-street formats were both productive in the leasing activity. High-footfall locations have been popular with traditional brands and new-age retailers with a growing preference to experience-based retail including dining, entertainment and mixed-use retail-residential precincts where customer traffic is constant.
Retailers Come Back with Growth Strategies
The diversification of retail tenants has been one of the characteristics of 2025. Fashion, lifestyle, F&B (food and beverage), and entertainment categories have taken precedence and all of them are contributing a large part of lease take-ups. There is information that fashion and apparel brands remain ahead of the pack in terms of absorption, with D2C players experimenting more with brick-and-mortar to augment online presence.
This reversal of leasing is not just a reminiscent response but to more fundamental confidence in consumer spending and retail real estate fundamentals. As the consumer sentiment has improved and an increasing number of people are visiting the shopping malls due to the holiday season, the retail landlords have been able to strike good deals, as retailers are getting long-term leases to be able to effectively exploit increasing demand.
Real Estate Widens focuses on Recovery Retail
The increase in retail leasing also favors other components of the real estate ecosystem. Combination development and integrated development, where residential, office and retail elements are integrated, are on the increase as they provide the brands with access to an inherent customer base that lives, works and shops in very close proximity. Developers, including Signature Global, City of Colours in this context, are realigning their product developments to reflect retail inclusive precincts and community hubs that will add value and attractiveness to their overall developments.
