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India’s retail real estate market recorded a landmark year in 2025, with leasing activity across major cities rising to around 8.9 million square feet, reflecting renewed confidence among retailers and developers amid a steady recovery in consumer spending.
The strong absorption was driven by robust demand from fashion, food and beverage (F&B), jewellery and emerging direct-to-consumer (D2C) brands, many of which are accelerating their offline expansion strategies. A sharp increase in quality supply also played a critical role, as developers brought a significant volume of new shopping centres and high-street assets to the market during the year.
Southern cities led the leasing momentum, with Hyderabad emerging as the most active market, accounting for a sizable share of total absorption. Delhi-NCR and Chennai followed closely, supported by the addition of new malls and heightened retailer interest in experiential formats and flagship stores.
Industry experts said retailers are increasingly focusing on larger, experience-driven outlets to enhance customer engagement, particularly as Gen Z and millennial shoppers seek immersive in-store experiences alongside digital touchpoints. Formats such as anchor stores, themed F&B clusters and interactive brand showcases gained traction through the year.
The surge in leasing activity underscores India’s strengthening consumption story, aided by stable economic conditions, rising urban incomes and the continued expansion of organised retail. Analysts noted that while apparel and fashion remained the largest contributors to demand, categories such as beauty, jewellery and dining saw faster growth, reflecting changing lifestyle preferences.
With a healthy pipeline of upcoming retail developments and sustained interest from both domestic and international brands, the sector is expected to maintain its momentum into 2026, positioning India as one of the most dynamic retail real estate markets globally.
