India’s retail leasing touched a record 8.9 million square feet in 2025, even as fresh supply jumped to 4.3 million sq ft, a 268 per cent rise from 2024. Hyderabad led new completions, contributing over half of the annual supply additions, followed by Mumbai and Delhi-NCR. Demand continues to be driven by retailers’ push for experiential flagship stores, kiosks, and Gen Z–focused formats that are boosting footfalls, dwell time, and brand engagement, a report by CBRE has said.
The report titled India Retail Figures H2 2025 said that despite global volatility, retailers, both domestic and international, are committing capital to India’s consumption story, with a sharp focus on quality assets and experience-driven formats.
“The total supply during the year was recorded at about 4.3 million sq ft, 268% higher than in 2024. Hyderabad led the supply with 52% share, followed by Mumbai at 30% share and Delhi-NCR with 18% share,” the report said.
During the July–December 2025 period alone, around 2.1 million sq ft of new retail supply became operational. Retail space take-up in the second half of the year rose to about 5.6 million sq ft, led by Hyderabad with a 34% share, followed by Delhi-NCR at 20% and Chennai at 16%, it said.
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GenZ-focused formats and AI are reshaping retail spaces
CBRE said that technology is also reshaping physical retail spaces. “AI-driven technologies are further underpinning this transformation, enabling hyper-personalised styling through generative AI, virtual try-ons, social sharing to reduce returns and manage inventory through predictive modelling,” the report said.
Entertainment zones within malls are emerging as another key growth driver. These spaces are increasingly being designed as high-tech hubs featuring edutainment, virtual reality and gamified loyalty systems. According to CBRE, such zones help landlords monetise underutilised areas while generating rental premiums for nearby F&B tenants and ensuring longer lease tenures.
““For landlords, these centres serve as vital assets for active management, effectively monetising large, windowless ‘dead spaces’ while generating a considerable rental premium for adjacent F&B tenants,” said Magazine, adding that these zones could offer long-term income stability through extended lease terms, successfully blending multi-generational play with robust real estate valuation,” Anshuman Magazine, Chairman and CEO for India, South-East Asia, the Middle East and Africa at CBRE said.
“Leasing momentum is being fuelled by retailers’ emphasis on experiential flagship stores, kiosks and Gen Z-focused formats,” he said, pointing out that the record leasing volumes signal a decisive shift towards quality-led, experience-driven retail growth.
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Fashion and apparel brands dominate leasing
The report said that fashion and apparel brands dominated leasing activity, accounting for nearly 48% of total absorption in 2025. According to CBRE, D2C brands alone contributed about 27% of total retail leasing during the year.
Food and beverage operators also expanded steadily, accounting for about 12% of total leasing volume, driven by demand for large-format, experiential outlets in premium malls and prominent high streets. Jewellery brands followed with an 8% share, with the tenant mix evolving beyond traditional gold retailers to include lab-grown diamond brands that are rapidly scaling their physical presence.
Ram Chandnani, Managing Director, Leasing Services, CBRE India, said retailers benefited from India’s consumption uptrend in the second half of the year, supported by low inflation, income tax revisions and GST rationalisation. “While domestic players continue to dominate leasing activity, international retailers remain active, reinforcing India’s position as a key long-term retail market,” he said.