The Indian retail real estate market has experienced a significant surge in leasing activity in the first quarter of 2025, driven by expanding businesses and evolving consumer preferences. According to Cushman & Wakefield’s latest Retail MarketBeat Report, leasing volumes across eight major cities rose by 55% in the January-March period, reaching over 24 lakh square feet. High-street retail spaces, particularly in cities like Delhi-NCR, Mumbai, Bengaluru, and Hyderabad, continue to dominate the market, while a new wave of developments in mixed-use projects is emerging as a key trend. This dynamic shift reflects growing market confidence and evolving consumer demands.
Surge in Leasing Activity
In the first quarter of 2025, the retail leasing market saw a substantial increase, with leasing volumes climbing to 24.08 lakh square feet from 15.56 lakh square feet in the same period last year, representing a 55% growth. This upward trajectory underscores the growing optimism within the retail sector, with businesses actively seeking to expand their footprints in India’s top cities. The data, presented by real estate consultancy firm Cushman & Wakefield, highlights the resurgence of retail leasing following a period of cautious expansion during earlier stages of the pandemic.
High-Street Retail Dominates the Market
High-street retail locations continue to be the dominant force in the retail leasing landscape. 16.9 lakh square feet of the total leasing activity was attributed to high streets, accounting for nearly two-thirds of the total leasing volume. Major cities like Delhi-NCR, Mumbai, Bengaluru, and Hyderabad have witnessed an uptick in demand for premium high-street spaces. These areas, which often feature high foot traffic and brand visibility, are proving to be the most sought-after by retailers looking to expand in prime locations.
While mall leasing accounted for 7.2 lakh square feet, the trend towards high-street retail is indicative of the growing consumer preference for vibrant, accessible shopping environments. The continued popularity of these locations reflects the evolving shopping behavior of Indian consumers, who seek both convenience and experience.
Growing Demand in Emerging Markets
India’s retail sector is witnessing a structural shift, with increased demand for quality retail spaces in emerging markets. Saurabh Shatdal, Managing Director of Capital Markets and Head of Retail, India, at Cushman & Wakefield, attributes this growth to a clear trend where retail demand follows the availability of new, high-quality retail spaces. Cities with new developments are experiencing a marked increase in leasing activity, signaling a shift towards areas previously considered secondary or emerging.
One such shift is the rise of mixed-use developments, where office and residential complexes are now integrating retail spaces. This trend reflects a broader global movement toward creating well-rounded urban hubs, which combine living, working, and shopping experiences into a cohesive environment.
Expectations for the Future
Looking ahead, the outlook for India's retail leasing market remains optimistic. Nearly 7 million square feet (or 70 lakh square feet) of new retail space is expected to enter the market in the next three quarters, primarily consisting of premium Grade A malls. This fresh supply is likely to continue the momentum of the past quarter, fueling further growth and expansion across key cities.
According to Shatdal, the positive leasing activity is expected to persist through the year, driven by the influx of new developments and increasing demand for modern, high-quality retail spaces. The sector's resilience reflects a strong recovery and a long-term positive outlook for retail real estate.
Retail Categories Driving Leasing Demand
When analyzing the demand across various categories, the Entertainment and Fashion sectors have emerged as the largest consumers of retail space in shopping malls. These categories are particularly prevalent in urban hubs, reflecting the continued importance of experience-based retail offerings. Meanwhile, Fashion and Food & Beverage (F&B) remain the top drivers of leasing activity on high streets across the eight major cities, including Delhi-NCR, Mumbai, Chennai, Kolkata, Pune, Bengaluru, Hyderabad, and Ahmedabad.
These findings suggest that consumers are not only looking for products but are increasingly focused on experiences that blend entertainment, fashion, and dining, with many brands seeking spaces that align with this evolving demand.
City-Specific Trends and Insights
Several cities have seen particularly notable growth in retail leasing activity. For example, Gurugram, a key city in the Delhi-NCR region, has recorded impressive leasing volumes. According to Robin Pahuja, Co-founder and Director of ElitePro Infra, this growth further solidifies the city’s position as a preferred destination for businesses looking to expand.
Similarly, demand for premium retail spaces in the Delhi-NCR region is on the rise, as consumers in the area increasingly seek out sophisticated, experiential retail hubs. Pankaj Jain, Chairman and CMD of SPJ Group, emphasized that today’s consumers want experiences that leave a lasting impression, which is driving the demand for well-integrated, experiential retail spaces.
Conclusion: A Thriving Market with Promising Future Prospects
The retail real estate market in India is undergoing a remarkable transformation, fueled by a combination of strong demand, evolving consumer preferences, and a steady influx of new developments. As businesses look to expand and adapt to the changing retail landscape, both high-street and mall leasing activities are set to thrive. The increasing demand for premium retail spaces and the rise of mixed-use developments signal a shift towards more integrated and experiential retail environments.
With the continued growth of emerging cities and the expected addition of millions of square feet of new retail space, India’s retail leasing sector is poised for sustained growth well into 2025 and beyond.
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