Retail Leasing Surges to 2.4 Million Sq Ft in Q1 2025 Across India’s Top 8 Cities, Registers 55% YoY Growth

India’s retail sector has started the year 2025 on a high note, with leasing activity reaching 2.4 million square feet across the top eight cities in the first quarter. This represents a robust 55% year-on-year (YoY) growth and a steady 6% quarter-on-quarter (QoQ) increase, according to the Q1-2025 Retail MarketBeat Report released by global real estate services firm Cushman & Wakefield on April 8.

Hyderabad Leads the Leasing Charts

Among the eight major metropolitan regions, Hyderabad emerged as the frontrunner, accounting for 34% of the total leasing volume with 0.8 million sq ft leased. The city witnessed an impressive 106% YoY increase in leasing activity, driven by a blend of established high streets like HITEC City and Jubilee Hills, along with the rapid development of emerging retail hubs such as Kothapet, Secunderabad, Boduppal, and Kompally. The influx of new supply in these developing localities played a key role in attracting retail tenants and fuelling market momentum.

Mumbai and Delhi NCR Close Behind

Mumbai followed Hyderabad closely, securing 24% of the leasing share with 0.58 million sq ft leased. The city recorded a massive 259% YoY growth, the highest among all the cities analyzed. This exponential increase was largely attributed to the addition of new Grade A malls and the rising popularity of newly established high-street locations.

Delhi NCR also showed a strong performance with a 17% share in total leasing (0.41 million sq ft) and a 57% YoY growth. The region’s retail activity was significantly driven by demand from premium brands, food and beverage outlets, and entertainment chains, reinforcing its status as a high-consumption zone.

Stability in Southern Markets

Bengaluru and Chennai maintained steady growth, registering 0.19 million sq ft and 0.17 million sq ft of retail leasing, respectively. While the pace of growth was modest compared to other cities, these markets continued to benefit from stable demand and strategic expansions by retailers into key micro-markets.

Main Streets Continue to Drive Retail Leasing

One of the most prominent trends of Q1 2025 was the continued dominance of main streets, which accounted for nearly two-thirds of the total leasing volume. Out of the 2.4 million sq ft leased, 1.69 million sq ft was attributed to high-street locations. Key retail corridors in cities like Delhi NCR, Mumbai, Bengaluru, and Hyderabad attracted heightened interest from both domestic and international retailers.

Mall Leasing on the Rise

While main streets led the way, mall leasing also made notable progress with 0.72 million sq ft of leasing activity during the quarter. Mumbai topped the mall leasing segment with a 44% share (0.31 million sq ft), largely due to the opening of two new Grade A malls, which collectively added 1.3 million sq ft to India’s Grade A mall inventory. The country’s total Grade A mall supply now stands at approximately 63 million sq ft.

In terms of category-wise demand, entertainment and fashion brands emerged as the primary drivers in malls, contributing 34% (0.35 million sq ft) of total leasing. On main streets, fashion and food & beverage (F&B) brands dominated with a leasing share of 0.80 million sq ft.

Domestic Brands Lead the Charge

The report also highlighted that domestic brands were the primary force behind the surge in retail leasing, contributing to over 92% of the transaction volumes. Foreign brands, though present, accounted for just 8%, signaling that homegrown retail continues to lead expansion efforts and capitalize on the country's growing consumer base.

Outlook for the Rest of 2025

The outlook for the retail sector remains optimistic, with mall leasing expected to gain further traction in the coming quarters. Cushman & Wakefield projects that approximately 6.4 million sq ft of new mall supply will be introduced across the top eight cities by the end of 2025. Notably, 58% of this upcoming supply will be Grade A+ quality, reflecting the rising preference for premium retail infrastructure.

Commenting on the market trends, Saurabh Shatdal, Managing Director, Capital Markets and Head – Retail, India at Cushman & Wakefield, said, “India’s retail sector is evolving at a dynamic pace, and the strong leasing activity in Q1 2025 reflects growing market confidence. We’re seeing a clear trend where retail demand is following new, quality supply—cities with fresh developments are witnessing heightened transaction volumes.”

He also noted that beyond traditional malls, new retail hubs are increasingly taking shape within mixed-use developments that include office and residential spaces, indicating a shift toward integrated urban planning.

With nearly 7 million sq ft of new retail supply expected in the next three quarters, the Indian retail market is poised for continued growth, powered by both established brands and new entrants eyeing the country’s vibrant consumer landscape.