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Retail leasing activity across India's top eight cities dropped 6% year-on-year in the second quarter of 2025, with a total of 2.24 million sq ft leased, according to Cushman & Wakefield’s latest Q2 2025 Retail Market Beat report. The figure also marks a 5.4% decline compared to the previous quarter, although it aligns with average leasing volumes seen over the past year.
Despite the dip, leasing volumes for the first half of 2025 reached 4.61 million sq ft — a 17% increase from H1 2024 — indicating robust retailer sentiment and resilient consumer demand.
Hyderabad emerged as the top market with 0.76 million sq ft of retail space leased, followed by Mumbai (0.52 million sq ft) and Delhi-NCR (0.3 million sq ft). Together, these three cities accounted for more than 70% of the total leasing activity in Q2.
Pune (0.23 mn sq ft) and Bengaluru (0.18 mn sq ft) also saw notable activity, while Chennai (0.16 mn sq ft), Kolkata (0.05 mn sq ft), and Ahmedabad (0.04 mn sq ft) trailed behind. Mumbai and Pune saw significant year-on-year growth, with leasing volumes rising 1.6x and 1.5x respectively, highlighting strong momentum in western India.
Mall leasing accounted for 45% (1.01 million sq ft) of total activity in Q2 — the highest share in five quarters — reflecting a 42% quarter-on-quarter increase. However, high streets remained dominant with 55% (1.23 million sq ft) share, despite witnessing a 26% q-o-q drop.
No new malls were added during the quarter, though Grade A mall completions in H1 2025 stood at 1.3 million sq ft. This supply crunch pushed overall mall vacancy rates down by 77 basis points to 8.16%, with Grade A+ malls seeing even tighter vacancies at just 4.28%.
With limited availability in malls, many retailers continued turning to high streets, keeping rents steady and even elevated in prime areas such as Khan Market and Connaught Place.
Food and beverage (F&B) and fashion categories dominated leasing demand, together occupying more than half of the total leased space (1.17 million sq ft). The wellness sector posted a strong performance with an 8% share (0.18 mn sq ft), doubling its volume from the previous year despite a slight q-o-q dip.
Meanwhile, supermarkets and hypermarkets registered 3x growth from the previous quarter and a 10% year-on-year rise, reflecting sustained demand for convenience retail.
According to Cushman & Wakefield, nearly 4 million sq ft of new Grade A retail space is expected in the second half of 2025, with major developments planned in Delhi-NCR (West Delhi and Gurgaon), Hyderabad (North-West Hyderabad), and Mumbai (Eastern suburbs and South Mumbai).
“There is growing interest from international brands and continued momentum in wellness and grocery categories — all signs of an evolving consumer landscape in India,” said Suvishesh Valsan, Head of Research India at Cushman & Wakefield. “As more high-quality retail space becomes available, we expect leasing to accelerate, especially in Tier 1 cities.”
Despite the Q2 slowdown, the market outlook remains optimistic, with steady demand, tight mall vacancies, and a preference for experience-led retail formats shaping the next wave of expansion.
(Source: PTI)
