The retail real estate industry in India is experiencing strong growth in leasing activity, with the first quarter of 2025 seeing retail leasing in the top eight cities of India reach a total of 2.4 million square feet, an astounding 55% increase year-on-year. This growth is a continuation of recovery seen over the last couple of years and reflects a dynamic and growing market. Year-on-year, in addition to the 55% increase, the first quarter also had 6% growth against the fourth quarter of 2024, indicating sustained momentum.
Hyderabad Emerges as the Leading City
Hyderabad has surfaced as the leader in retail leasing, contributing 34% in the overall leasing activity with space of around 0.8 million square feet. This reflects astounding growth of 106% compared to the same period of the previous year. The increase in leasing activity is backed by both stable locations like HITEC City and Jubilee Hills, along with rapidly emerging areas like Kothapet, Secunderabad, Boduppal, and Kompally. Retailers have shown a great eagerness towards these prime areas as the city continues to develop its consumer base and commercial ecosystem.
Mumbai was a close second with 0.58 million square feet leased, or 24% of the total (an astonishing 259% YoY growth), driven by new high-street development and new Grade A mall space. The Delhi NCR was 17% of leasing activity/volume (0.41 million sq ft) with a lower, though still strong 57% YoY increase. The region continues to be a coveted space for premium brands and is considered a highly sought after retail location.
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Main Streets Dominate the Leasing Market
The continuing dominance of high-traffic main street locations is noteworthy in the retail property market. According to a recent report by Cushman & Wakefield, around two-thirds of overall leasing volume—1.69 million square feet—was absorbed by premium main street locations. Major markets such as Delhi NCR, Mumbai, Bengaluru, and Hyderabad have shown immense interest in the main street, with fashion, food & beverage, and entertainment being the main sectors driving demand.
Although malls remain a key driver of retail leasing, they completed 0.72 million square feet of leases. Mumbai retained the largest share of mall leasing with 44% which equals 0.31 million square feet of the total mall leasing. This strong performance was driven by the emergence of two Grade A malls that increased the retail real estate inventory by 1.3 million square foot.
Sector-Specific Demand Trends
In terms of sector demand, the largest consumers of retail space in 2022 were the fashion and entertainment categories which accounted for 34% of leasing activity mainly in malls. Fashion continues to be the largest category in retail with a strong presence on the high street. F&B also saw increased leasing activity, signaling the continuation of the trend toward experiential retail. Similarly, local brands represent the majority of retail leasing activity, whilst international brands represent approximately 8% share of leasing activity, with domestic brands continuing to be the majority share, illustrating the resilience and growth of homegrown retail in India.
A Positive Outlook for 2025 and Beyond
In the upcoming years, growth is forecasted for India's retail leasing market continuousily through 2025. By the end of 2025, an additional 6.4 million square feet of new mall space will be entering the market in the top eight cities. 58% of this new supply will be classified as premium Grade A malls, indicating an increased appetite for quality retail space. Conversely, mixed-use developments that feature retail, office, and residential components are also forming new retail hubs. Urban sprawl and consumer demand will continue to shift the retail real estate sector, with almost 7 million square feet of new space expected to be delivered over the next three quarters.
Conclusion
The retail leasing activity in India in Q1 2025 reflects the strong retail market and potential continued growth in leading cities, such as Hyderabad, Mumbai and Delhi NCR. Sustained growth in the sector is likely, driven by demand for prime retail space, increasing new developments, and consumers continuing to grow. Both domestic and international retailer interest and activity is being spurred by the growth potential, which is positioning India as one of the fastest growing retail markets globally.
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Ans 1. In the first quarter of 2025, retail leasing in India’s top eight cities reached a total of 2.4 million square feet, reflecting an impressive 55% year-on-year growth compared to the same period in 2024.
Ans 2. Hyderabad led the retail leasing activity in Q1 2025, accounting for 34% of the total leasing volume, or approximately 0.8 million square feet. The city saw a remarkable 106% growth in leasing activity compared to the previous year.
Ans 3. Fashion, food & beverage (F&B), and entertainment are the primary sectors driving retail space demand. Fashion continues to dominate both high-street and mall locations, while F&B outlets have seen a rise, indicating a shift towards experiential retail.
Ans 4. Mumbai followed Hyderabad closely, leasing 0.58 million square feet (24% of the total), with a 259% year-on-year growth. Delhi NCR accounted for 17% of the leasing activity, securing 0.41 million square feet, with a 57% increase compared to the previous year.
Ans 5. Main streets continue to dominate retail leasing, accounting for around two-thirds of the total leasing volume (1.69 million square feet). Premium high-street locations in cities like Delhi NCR, Mumbai, Bengaluru, and Hyderabad are especially popular with retailers.