India Leasing Hits 1.95 MSF In 2026 Amid Supply Tightness: Cushman & Wakefield

Gurugram, April 7, 2026: India’s retail real estate sector maintained a steady pulse in the first quarter of 2026, recording 1.95 million square feet (MSF) of leasing across the nation’s top eight cities. According to the latest Retail Market Beat Report from Cushman & Wakefield, the market is currently defined by a “demand-led” environment where retailer appetite remains strong despite a temporary pinch in the supply of new mall space.

According to a press release, while total leasing volumes moderated by 10% year-on-year, the dip is attributed to a lack of new mall completions during the quarter rather than a fading interest from brands. Delhi NCR emerged as the primary growth engine, commanding a 30% share of total activity with 0.59 MSF leased—a 45% jump compared to the same period last year. Hyderabad and Mumbai followed as key contributors, with the three cities combined representing 65% of all retail leasing nationwide.

The report highlights a significant shift toward organized retail formats, with mall leasing’s share of total activity rising to 47%, up from 33% a year ago. Even without new supply, existing premium malls saw vacancies tighten to historic lows, with Grade A+ assets reaching a nearly full occupancy level of 97.4%. Main streets continued to anchor the majority of volumes at 53%, particularly for domestic retailers who accounted for a dominant 87% of total absorption during the quarter.

Fashion and Food & Beverage (F&B) remained the twin pillars of the industry, together driving 46% of demand. However, experiential retail is carving out a larger slice of the pie, as entertainment-related leasing grew to an 11% share. This trend is particularly evident in malls, where international retailers have concentrated nearly 78% of their activity, signaling a clear preference for institutionally managed, high-quality environments over traditional high streets.

Gautam Saraf, Executive Managing Director – Mumbai & New Business at Cushman & Wakefield, noted that the current lower volumes are a reflection of a supply bottleneck rather than a lack of market depth. “India’s retail real estate market is currently operating in a demand‑led environment, where occupier interest continues to outpace the availability of high‑quality retail space. This is being driven by sustained expansion from domestic retailers, increased participation from international brands, and a clear shift towards organized, professionally managed retail formats. While leasing volumes in Q1 2026 appear lower on a sequential basis, this largely reflects the limited availability of suitable supply,” Saraf stated.

Looking forward, the supply drought is expected to break significantly. Real estate experts project approximately 5.88 MSF of new retail space to hit the market by the end of 2026, with a massive pipeline of nearly 15 MSF expected through 2028. Saraf added, “The continued tightening of vacancies across Grade A and A+ assets further reinforces this dynamic. As new supply begins to enter the market from 2026 onwards, largely skewed towards premium developments, we expect this depth of demand to translate into more consistent leasing activity, while supporting the continued institutionalization of India’s retail real estate landscape.”