India Retail Market Dynamics - Q4 2025

During calendar year 2025, India's retail sector delivered exceptional 54% year-on-year growth in gross leasing volume. This surge reflects unwavering retailer confidence across India's key consumption centres and aggressive expansion strategies by retailers against an uncertain global backdrop. A resilient economy coupled with rising discretionary spending is fueling this leasing renaissance, with offline retail formats witnessing an influx new brands entry.

Shopping malls captured 45% of the total leasing activity in 2025, while high streets commanded a dominant 48% share. Among India's top seven cities, Delhi NCR, Bengaluru, and Hyderabad emerged as the dominant forces behind 2025's gross leasing surge. Delhi NCR and Bengaluru each captured 24% of the total leasing volume, with Hyderabad closely following at 23%. Mumbai secured a 17% market share, while Kolkata (5%), Chennai (5%), and Pune (2%) registered modest single-digit contributions as retail leasing remained constrained by limited new supply.

India's retail sector maintains its robust growth trajectory, driven by substantial supply additions of 6.3 million sq. ft that have facilitated aggressive retailer expansion. This supply surge was pivotal in enabling 2025's gross leasing volume to exceed the previous year's total. As of end of 2025, the mall stock in the top seven cities stood at nearly 92 million square feet. The availability of premium institutional-grade mall space encouraged retailers to accelerate store launches in prime locations.

In calendar year 2025, fashion & apparel (34%) and food & beverage (20%) together comprised more than half of the annual leasing. However, the share of fashion and apparel has moderated from 41% in 2023 to 34% in 2025 though it still retains the top slot due to continual demand from renowned domestic and D2C brands. Between 2023 to 2025, it is F&B that has gained in share from 16% in 2023 to 20% in 2025, emerging as a clear winner in terms of redefining retail space requirements. Domestic retailers led leasing activity in 2025 with more than 10 million square feet of retail spaces leased. This was largely driven by the growing offline expansion of D2C brands, alongside continued growth by fast fashion and F&B operators.

India’s retail sector is undergoing a structural shift wherein our shopping malls are transforming from fragmented developer-driven properties into long-term income yielding assets. With approximately 46.5 million s.f.in the development pipeline, retail assets that incorporate tech, hospitality and experience related elements stand to command high footfalls and drive rental growth.