India’s retail real estate sector is witnessing a structural transformation, shifting from traditional transactional spaces to experience-led ecosystems. According to the latest market data for the second half of 2025, the sector recorded a robust leasing absorption of 4.3 million sq. ft. across the top seven cities. However, the headline story lies in the geographic concentration of supply and a decisive tilt toward high-street retail over conventional shopping malls.
The Supply Epicenter: NCR and Hyderabad Lead the Charge
The development pipeline for 2026 and beyond reveals a significant geographic skew. Delhi-NCR and Hyderabad collectively account for nearly 70% of the upcoming retail supply. Developers in these regions are increasingly moving away from box-format malls toward destination-grade developments and mixed-use projects. These new-age hubs integrate retail with wellness, fine dining and entertainment, catering to a consumer base that prioritizes social experiences over mere product acquisition.
Delhi-NCR: Continues to see traction driven by apparel and entertainment-led leasing.
Hyderabad: Emerging as a powerhouse for hypermarkets and large-scale Family Entertainment Centres (FECs).
High Streets vs. Malls: The Rental Divergence
In 2025, high streets emerged as the clear winners in terms of capital appreciation and brand preference. While mall rentals remained largely stable with growth limited only to Grade-A assets, key high-street micro-markets saw notable rental hikes.
Why High Streets?
Availability: With vacancy levels in premium malls hitting historic lows, brands in the luxury, fashion, and F&B sectors are pivoting to high streets to sustain expansion.
Efficiency: Retailers are favoring mid-sized store formats (1,000 – 5,000 sq. ft.) that offer high visibility with lower overheads compared to large mall anchors.
24/7 Presence: High streets offer brands physical billboard value and independent operational hours, which is crucial for the surging F&B and Gen Z focused brands.
Sectoral Demand Drivers: Apparel & Experience
The leasing momentum in H2 2025 was spearheaded by the Apparel sector, followed closely by Entertainment, Hypermarkets and F&B. A notable trend is the premiumization of demand. Even within traditional categories, there is a shift toward experiential flagship stores. Direct-to-Consumer (D2C) brands, which were previously digital-only, accounted for nearly 27% of total leasing in 2025, marking their arrival as a dominant force in physical retail.
City-Specific Trends at a Glance
Mumbai & NCR: Dominance of fashion, luxury, and entertainment-led leasing.
Bengaluru & Hyderabad: Stronger participation from anchor categories like hypermarkets and FECs.
Chennai: Sustained demand in discretionary segments, specifically jewellery and apparel.
The 2026 Outlook
As we move further into 2026, the industry is expected to see:
The Rise of Destination Malls: Over 50% of the supply through 2028 will consist of destination malls exceeding 800,000 sq. ft.
Transit-Oriented Development: A surge in retail integration within airports, metro stations, and highway transit hubs.
Omnichannel Maturity: Physical stores are no longer just points of sale but critical nodes in a brand's fulfillment and engagement strategy.
Conclusion
The retail landscape is no longer about just square footage. The data from 2025-26 confirms that brands are willing to pay a premium for locations that offer high engagement, whether in a sprawling destination mall in Hyderabad or a bustling high street in Delhi. For developers, the message is clear: the future is experiential, and the growth is concentrated.
Data Sources:
ANAROCK Retail: RELEAP 2026 Report
CBRE India: Market Monitor Retail Q4 2025
JLL Research: India Retail Market Dynamics 2025
Cushman & Wakefield: Retail Market Beat Q3/Q4 2025
.png)