- High streets dominate with 55% share, malls regain ground with 45%
- Hyderabad, Mumbai and Delhi-NCR collectively account for over 70% of total leasing activity, with Mumbai registering a 1.6X y-o-y growth
- 4.16 MSF of Grade A Malls projected to reach completion by Q4 2025
Cushman & Wakefield, one of the largest and fastest growing real estate services firm in India, released its Q2-2025 Retail Market Beat Report, highlighting continued strength in leasing activity across high streets and malls across the country.
According to the report, the second quarter of 2025 recorded ~ 2.24 million square feet (MSF) of leasing across malls and high streets in the top eight cities. The figure is in line with the average quarterly volume observed over the past four quarters, though it represents a slight 5.4% dip q-o-q and a 6.3% dip y-o-y.
With this, H1 2025 leasing volumes stood at 4.61 MSF, marking a 17% y-o-y growth, reaffirming strong retailer sentiment amid stable consumer demand.
Malls accounted for 45% of leasing volume in Q2 (1.01 MSF) – a 42% q-o-q rise, and the highest mall share in the past five quarters, signaling growing interest in experience-driven, structured retail formats. However, high streets witnessed a 26% q-o-q decline, although they continued to dominate with 55% (1.23 MSF) of leasing activity, underscoring the persistent undersupply of quality mall stock across cities.
No new mall supply was added in Q2, and Grade A mall completions for H1 2025 stood at 1.3 million square feet. As a result, mall vacancy levels dropped by around 77 basis points to 8.16% in Q2 2025, with premium Grade-A+ or superior malls witnessing even tighter vacancies at just 4.28%. This highlights the growing demand for premium retail assets and further strengthening landlord leverage in prime locations.
Meanwhile, average mainstreet rents remained stable on a q-o-q basis, while recording a healthy 6% y-o-y rise.
Suvishesh Valsan, Head, Research- India at Cushman & Wakefield said,
“India’s retail sector continues to demonstrate strong momentum, with consistent growth in leasing volumes pointing to a healthy underlying demand. High streets remained the dominant driver of activity, while vacancy levels in Grade-A malls have tightened further – reflecting a clear and growing preference for high-quality and experience-led retail spaces. Looking ahead, we remain optimistic. Nearly 4 MSF of new Grade A supply is expected in the second half of the year, particularly across key metros such as Mumbai, Delhi-NCR, and Hyderabad. This should help bring more balance to the market and open up fresh opportunities for retailers to expand in line with evolving consumer expectations.
What’s also noteworthy is the growing interest from international brands and the sharp uptick in leasing across categories like wellness and grocery — both of which signal a broader shift in India’s consumption landscape. As new supply comes online, we expect leasing momentum to further accelerate, particularly in top-tier urban markets.”
In terms of cities, Hyderabad, Mumbai and Delhi-NCR emerged as the top-performing markets, recording leasing volumes of 0.76 MSF, 0.52 MSF and 0.3 MSF respectively- collectively accounting for over 70% of the total leasing activity in the quarter. They were followed by Pune (0.23 MSF), Bengaluru (0.18 MSF), Chennai (0.16 MSF), Kolkata (0.05 MSF) and Ahmedabad (0.04 MSF).
With respect to growth in leasing volume, the western cities of Mumbai and Pune saw a 1.6X and 1.5X rise in volume on a y-o-y basis during the quarter.
Additionally, domestic retailers continued to maintain a dominant position in leasing volume with 86% share (1.93 MSF). The quarter also witnessed a notable uptake in international retailer participation, whose share rose to 14% with 0.31 MSF of leasing activity, up from ~8.5% in the previous quarter. This growth was largely driven by malls, which remain the preferred format for global brands seeking structured environments, brand visibility, and curated customer experiences.
In terms of category demand, Food & Beverage and Fashion remained the primary space takers across both mall and high street formats in Q2 2025, accounting for more than 50% share of leasing activity (1.17 MSF), reflecting consumers’ growing preference for lifestyle-driven retail and experiential offerings. The wellness category also posted strong growth, capturing 8% share of the leasing volume at 0.18 MSF- a 2x y-o-y increase and a marginal 13% q-o-q dip. Meanwhile, supermarkets and hypermarkets clocked 3x q-o-q growth and 10% y-o-y increase in leasing volume reaching 0.18 MSF, reflecting robust demand for daily essentials and convenience-driven retail formats.
Looking forward, the second half of the year is likely to see a significant influx of new supplies, especially within Delhi-NCR, Mumbai, and Hyderabad. The new inventory is expected to alleviate pressure on vacancy and provide new opportunities for retailers actively looking for expansion.
City specific insight from the reports-
Ahmedabad: In Q2 2025, Ahmedabad recorded retail leasing volume of ~0.04 MSF, a fall of 17% on q-o-q terms and nearly 63% fall on y-oy basis. With no new mall completions for almost a year, the overall vacancy has tightened to 13.8%, a 159-basis points y-o-y dip. Malls that qualify as Superior grade assets in the city have a tight vacancy rate in the range of 2-4%.
Bengaluru: The city recorded retail leasing volumes of around 0.18 MSF, a marginal 6% decline on a quarterly basis. With no new supply in Q2, city’s headline vacancy in Grade A malls fell sharply by 120 bps at 5.6% during the quarter on the back of strong leasing activity. Extremely tight vacancies (i.e. under 3%) prevailed in the city’s superior malls.
Chennai: Retail leasing activity in Chennai stood at approx. 0.16 MSF during Q2. Overall mall vacancy declined by 57 basis points q-o-q, standing at 13.56% in Q2. Superior malls continued to see strong occupancy, with vacancy levels remaining tight at 1-2%.
Delhi-NCR: Retail leasing in Delhi NCR stood at 0.3 MSF in Q2 2025, a drop of 26% q-o-q and 41% y-o-y. The headline mall vacancy declined by 24 bps during Q2, and by 234 bps on a y-o-y basis to 11.9%. Superior malls continue to record very tight vacancy of ~3%. Vacancy in malls other than the superior category remains ~19% as of Q2-25. Approximately, 1.7 MSF of Grade A mall supply is expected to become operational in Delhi before the close of the year.
Hyderabad: Hyderabad's retail leasing activity stood at ~0.8 MSF in Q2 2025. No new Grade-A retail mall supply was recorded in Hyderabad during Q2 2025, keeping vacancy rates low at 1.85% in superior malls. Looking ahead, Hyderabad is set to witness a retail supply of 1.7 MSF slated by the end of the year.
Kolkata: Kolkata recorded retail leasing volumes of ~0.05 MSF in Q2, a 30% growth on a quarterly basis. The city recorded no new mall completion in Q2. City-wide headline mall vacancy stood at 6.6%, declining by 20 bps on a quarterly basis. Grade A vacancy remained extremely tight, dropping marginally by 10 bps to 2.5%.
Mumbai: Retail leasing activity in the city stood at 0.52 million sq ft in Q2 2025, registering a q-o-q 10% decline, but marking a robust 1.6X increase compared to the same period last year. The city saw no new retail supply in Q2 2025. However, the headline vacancy numbers increased slightly by 70 bps q-o-q to 7.9% on account of select retailers relocated to acquire new spaces.
Pune: Retail leasing activity in Q2 2025 stood at 0.23 million sq ft. Vacancy in Grade-A malls in Q2 2025 declined to 6.84%, driven by healthy leasing in select assets and space churn by existing retailers, amid no new supply. Superior-grade malls maintained tighter vacancy levels of 5–6%, reflecting continued demand for quality retail spaces.