India’s Retail Leasing Reaches 2.22 MSF in Q3 2026 as Grade A Mall Vacancy Tightens to 4.8%
Gurugram, October 1, 2026: India’s retail real estate sector recorded a gross leasing volume of 2.22 million square feet across the top eight cities in Q3 2026, according to Cushman & Wakefield’s latest Retail MarketBeat Report. While leasing moderated by 7.3% quarter-on-quarter and 4.4% year-on-year, year-to-date volume reached 6.57 million square feet, reflecting a 0.4% increase over the previous year despite the absence of new Grade A mall supply for three consecutive quarters.
Main streets dominated leasing activity during the quarter, accounting for 67.9% of total volumes at 1.51 million square feet, representing a 29.3% quarter-on-quarter surge. Mall leasing accounted for the remaining 32.1% at 0.71 million square feet as high-quality mall space availability remained constrained. Domestic retailers led the market by driving 86.3% of total leasing. Regionally, Delhi NCR, Hyderabad, and Mumbai spearheaded activity, together capturing 61% of overall quarterly leasing.
The lack of new mall additions drove Grade A mall vacancy down by 20 basis points quarter-on-quarter to 4.8%. Sector-wise, fashion remained the top demand driver at 24.9%, followed by food and beverage at 19.2% and lifestyle at 13.1%. On the rental front, prime high-street rents appreciated by an average of 6.8% year-on-year. Looking forward, approximately 12.7 million square feet of Grade A mall space is expected to enter the market through 2028 to ease supply constraints.
Gautam Saraf, Executive Managing Director – Mumbai & New Business at Cushman & Wakefield, said, “India’s retail market continues to demonstrate steady underlying occupier interest, even as quality retail space remains constrained. While leasing moderated during the quarter, year-to-date activity remains largely in line with last year, with a slight increase. This is despite three consecutive quarters without new Grade A mall supply, indicating that limited availability is increasingly influencing the pace of leasing.”
Milin Rohinesh, Head of Retail-India at Cushman & Wakefield, added, “Retail demand remained broad-based in Q3 2026, with fashion, F&B and lifestyle categories together accounting for more than half of quarterly leasing. The diversity of activity across categories highlights the continued evolution of India’s organised retail market, supported by newer concepts and the expansion of home-grown brands.”
