India’s retail real estate market is expected to lease over 9 million square feet (msf) of retail space by the end of 2025, up from 7.8 msf in 2024, driven by new Grade A mall supply and F&B demand, according to Cushman & Wakefield’s India Outlook 2026 report.
The year-end surge is being driven by the completion of several Grade A malls in the final quarter, helping organised retail regain momentum after two years of tight supply. “While high streets continue to see healthy traction, leasing activity that was earlier delayed due to limited availability of quality mall space is now finding opportunities in newly completed assets, helping malls regain their share. Fashion, food & beverage and entertainment continue to be the primary demand drivers underpinning this momentum,” the report said.
After limited Grade A mall additions of just 0.9 million sq ft in 2024, new completions in 2025 are projected at around 4.3 million sq ft, according to the report.
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“The improving supply environment has been a critical factor behind the step-up in leasing from 7.8 msf in 2024 to 9 msf in 2025, enabling retailers to finally execute expansion plans that had been on hold due to space constraints,” it said.
Gautam Saraf, Executive Managing Director, Mumbai and New Business at Cushman & Wakefield, said the year reflects a decisive turnaround for the sector. “India’s retail real estate market is set to record its highest leasing activity since the pandemic, reaching nearly 9 MSF in 2025, driven by a strong year-end surge as new mall supply becomes operational in Q4,” he said, adding that fresh completions have played a “catalytic role” in releasing pent-up demand and pushing absorption to record levels.
Leasing is expected to touch 10-11 msf in 2026
The report stated that in 2026, leasing is projected to reach 10–11 million sq ft. The report also noted that about 5.9 million sq ft of new mall supply is lined up for next year, with nearly three-fourths expected to be Grade A+ assets. Cities such as Bengaluru, Chennai, Mumbai and Hyderabad are likely to see a bulk of these additions, improving choices for retailers and supporting expansion beyond space-constrained growth.
Saraf said the next phase will be shaped by premiumisation, as malls evolve into lifestyle hubs anchored by curated formats and global brands. “With a robust pipeline for 2026, the market is entering a phase of meaningful capacity addition focused on higher-quality retail formats,” he said, pointing to platform-led partnerships and international brand rollouts as signs of rising discretionary spending and confidence in India’s consumption story.
While average mall rents may stabilise in markets with heavy supply, Cushman & Wakefield expects top-grade malls and dominant high-street locations to continue seeing firm rentals, supported by demand-supply mismatches in prime assets.