Retail Leasing to Close 2025 at a Record MSF, Highest Since Pandemic: Cushman & Wakefield

Gurugram, December 23, 2025: India’s retail real estate market is set to end 2025 with a record 9 million square feet (msf) of leasing, marking the highest annual absorption since the pandemic and a sharp rise over ~7.8 msf in 2024, according to Cushman & Wakefield’s ‘India Outlook 2026’ report. The strong year-end closure that is expected reflects a decisive return of mall-led absorption as new Grade A supply becomes operational in key markets in the last quarter. 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.

This acceleration in leasing is being supported by a visible improvement in supply. After a constrained 2024, when Grade A mall completions were limited to 0.9 msf, new deliveries in 2025 are projected to close at around ~4.3 msf, driven by completions in the last quarter, easing scarcity, though not fully bridging the gap created over the past two years. The improving supply environment has been a critical factor behind the step-up in leasing from ~7.8 msf in 2024 to ~9.0 msf in 2025, enabling retailers to finally execute expansion plans that had been on hold due to space constraints.

Leasing Momentum Expected to Remain Strong

Looking ahead, the report highlights that retail leasing momentum will strengthen further in 2026, with total demand projected at ~10–11 msf, driven by improved availability of quality mall space and the release of pent-up demand that was constrained by limited supply. The mall pipeline for 2026 stands at ~5.9 msf, with about 76 per cent expected to be Grade A+ assets (top grade assets within the overall grade-A mall universe), which will significantly improve choice for retailers and support expansion across key cities such as Bengaluru, Chennai, Mumbai and Hyderabad. This fresh supply is expected to ease extreme tightness in vacancies and enable a healthier phase of growth led by expansion rather than space constraints.

High-street leasing, which gained share during periods of mall scarcity, is expected to remain steady in 2026, supported by established corridors and neighbourhood locations, even as mall absorption improves with new Grade A and A+ completions. On rentals, while average mall rents may normalise in supply-heavy markets in 2026, Grade A+ malls and dominant high-street locations are expected to see resilient rental momentum, with new openings setting higher benchmarks and re-leasing in top-performing assets offering scope for rent resets amid persistent demand-supply mismatch.

The report also highlights that premiumisation is expected to strengthen in 2026, supported by a broader pipeline of global brand rollouts, platform partnerships, and supply of high-quality malls. Incremental mall development is also extending into select Tier II cities, driven by rising consumption and improving developer capability.

Gautam Saraf, Executive Managing Director, Mumbai & New Business, Cushman & Wakefield said, “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. This sharp uptick underscores the catalytic role of fresh completions in unlocking pent-up demand and pushing absorption to record levels. With a robust pipeline lined up for 2026, the market is now entering a phase of meaningful capacity addition focused on higher-quality retail formats. This supply expansion is closely aligned with a clear trend of premiumisation, as consumer preferences continue to shift towards experience-led retail and malls evolve into lifestyle destinations anchored by curated formats and premium brands. Platform-led partnerships and global brand rollouts further reflect rising discretionary spending and growing confidence in India’s consumption story.”

“Together, these trends point to a retail market that is scaling up—driven by quality supply, premiumisation and the release of pent-up demand, while resilient consumption fundamentals provide a strong base for sustained growth.”