India’s retail real estate sector is entering a renewed growth phase, with leasing activity expected to cross 9 million square feet by the end of 2025, according to a recent industry outlook by a global property consultancy. The rise marks a notable recovery from 2024 levels and signals a broader shift in how organised retail is positioning itself within India’s evolving urban economy.
The expansion is being fuelled largely by the arrival of new Grade A shopping centres, particularly in the latter half of the year. After a prolonged period of constrained supply, developers are delivering higher-quality assets that are enabling retailers to execute long-delayed expansion strategies. Industry analysts note that this return of institutional-grade malls is helping organised retail reclaim ground previously ceded to high streets and mixed-use developments. Retail categories such as fashion, food and beverage, and entertainment continue to dominate demand. These segments, closely linked to discretionary spending and urban lifestyle consumption, are increasingly favouring malls that offer experiential formats rather than pure transactional retail. “Retailers are prioritising destinations that integrate leisure, dining and community spaces, reflecting a shift in consumer behaviour,” said an industry expert tracking mall developments across major cities. Supply dynamics have played a decisive role. New mall additions in 2025 are expected to be several times higher than the previous year, easing a bottleneck that had restricted growth despite strong consumer demand. An official familiar with leasing trends said the improved availability of compliant, well-located retail space has been instrumental in pushing India retail leasing volumes to their strongest levels since the pandemic.
Looking ahead, momentum is expected to continue into 2026, with leasing projected to reach 10 to 11 million square feet. A robust development pipeline, dominated by premium and Grade A-plus assets, is taking shape across Bengaluru, Mumbai, Chennai and Hyderabad. These projects are designed with energy-efficient systems, improved walkability and integrated public transport access, aligning with emerging expectations around sustainable urban infrastructure. For cities, the implications extend beyond retail metrics. Well-planned malls are increasingly being positioned as employment hubs and social anchors, contributing to local economies while reducing the need for long-distance travel. Urban planners point out that compact, transit-linked retail destinations can lower carbon footprints when embedded within mixed-use neighbourhoods. Rental trends are expected to remain stable overall, although prime malls and dominant high-street locations may continue to command premiums due to limited availability. Analysts suggest this bifurcation underscores the importance of quality over quantity in the next phase of retail development.
As India retail leasing scales up, the challenge for policymakers and developers alike will be to balance growth with inclusivity ensuring that new retail infrastructure supports equitable access, resilient urban design and long-term sustainability, rather than unchecked sprawl.
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India Retail Real Estate To Lease 9 Million Sq Ft By 2025
