India’s retail sector continues to be on an upward growth trajectory underscored by steady demand from retailers. In Q3 2025 (July-September), India’s top 7 cities witnessed 3.2 million sq. ft of gross leasing, indicative of a substantial 65% year-on-year (Y-o-Y) growth.
On a quarter-on-quarter (q-o-q) basis, the Q3 2025 gross leasing volume reflects a 22% growth. With total new supply infusion of 1.5 million sq ft in Delhi NCR and Hyderabad, retailers that were waiting for expanding footprint due to supply constraints in the past, were finally able to move ahead with new store openings in key micro markets. Interestingly, both shopping malls and high streets have been at the forefront of new leasing momentum, and this quarter witnessed 53% and 41% share of leasing in these formats respectively.
Across the top 7 cities, Delhi NCR and Hyderabad led the gross leasing momentum in Q3 2025. Delhi NCR (35%) and Hyderabad (12%) emerged as clear market leaders in the city tally as demand for retail leasing in these markets increased significantly compared to the previous quarters. While shopping malls comprised lion’s share in gross leasing in Delhi NCR, high streets garnered immense interest for expansion by retailers in Hyderabad. followed by Bengaluru at 0.4 million sq.ft. Cities such as Kolkata and Chennai witnessed steady demand momentum in comparison to previous quarters. Pune witnessed a slight dip in retail spaces leased as compared to Q2 2025.
In Q3 2025, Fashion & Apparel (35%), Food & Beverage (16%) and Daily Needs and Grocery (11%) maintained strong leasing momentum for retail space take-up. Popular brands in these categories continued their demand dominance in the overall organized retail landscape and were mainly led by domestic retailers. In Q3 2025, an increase in demand from daily needs and grocery retailers was witnessed, which typically constitute large space take-ups and often act as anchor tenants in prime retail assets.
Direct-to-consumer (D2C) brands have been betting big on their click-and-mortar strategy and are gradually inching up their physical store footprint across retail formats, mainly in categories such as fashion and apparel, jewellery and beauty, cosmetics and wellness. Going forward, the share of D2C brands is set to increase in the overall gross leasing pie.
The strong foothold of domestic retailers in demand for retail spaces continues unhindered as indigenous brands leased 2.6 million sq. ft. space in Q3 2025, indicating a 76% Y-o-Y growth. Foreign brands comprised 19% share in this quarter’s leasing. In the 9 monthly period from January-June 2025, luxury retailers leased 0.2 million sq ft retail space, which is 19% higher compared to the year-ago period. While limited luxury retailers entered India in 2025 so far, growth trajectory in area leased signals strong market fundamentals and availability of investment-grade retail infrastructure in India which is much sought after for exclusive stores by these brands.
Based on the strong demand momentum witnessed in the 9-monthly (January-September) period, gross leasing is expected to touch a new high of 10.5-11.5 million s.f. by the end of calendar year 2025. Backed by a strong development pipeline of new retail assets in Q4 2025, the overall leasing total in India is expected to surpass our previous estimates of ~10 million s. f.