India’s organised retail real estate market recorded a sharp rebound in 2025, with leasing activity across the country’s largest urban centres reaching its strongest level in three years. Industry data indicates that retailers collectively absorbed 12.5 million square feet of space across malls and high-street locations, reflecting renewed confidence in consumer spending and the evolving role of physical retail within India’s cities.
The recovery was led by Delhi NCR, Bengaluru, and Hyderabad, which together accounted for more than two-thirds of total leasing activity. These markets benefited from a combination of rising household incomes, improving urban mobility, and the availability of large-format, institutional-grade retail developments. Mumbai followed closely, while Chennai, Kolkata, and Pune experienced more measured growth, largely due to limited new supply rather than lack of demand. Urban analysts note that the resurgence marks a structural shift rather than a short-term bounce. After a period of moderation in 2024, retailers returned aggressively to brick-and-mortar expansion, supported by stabilising inflation and stronger discretionary consumption. This renewed momentum has reinforced the importance of retail districts as economic and social anchors within dense metropolitan environments. High streets and shopping malls emerged as near-equal contributors to leasing volumes, underscoring the dual nature of India’s retail geography. While malls continue to attract premium brands and experiential formats, street-facing locations remain critical for visibility, accessibility, and neighbourhood integration particularly in technology-driven cities such as Bengaluru. The final quarter of the year proved decisive, accounting for a significant share of annual leasing as retailers accelerated store launches ahead of peak consumption cycles.
This surge was enabled by the addition of more than six million square feet of new retail supply during the year, easing constraints in several high-demand corridors. Domestic brands remained the backbone of market activity, driving the majority of new leases. Indian retailers expanded their physical footprints across categories, with fashion continuing to dominate, while food and beverage concepts increased their presence as dining and social experiences became central to retail design. Direct-to-consumer brands also deepened their offline strategies, using physical stores to strengthen brand trust and customer engagement. International retailers expanded at a faster pace, signalling confidence in India’s long-term consumption story. The entry of new global brands reflects growing alignment between Indian urban markets and global retail standards, particularly in terms of mall quality, store sizes, and customer experience. From an urban development perspective, the expansion carries broader implications. As retail stock across major cities approaches 100 million square feet, planners and developers face the challenge of integrating these assets with public transport, climate-responsive design, and inclusive public spaces.
Experts caution that future retail success will depend less on scale and more on adaptability including energy efficiency, mixed-use integration, and experience-led design. With a substantial pipeline of new malls under construction through the end of the decade, India’s retail real estate sector is entering a phase where resilience, sustainability, and urban relevance will determine long-term value.
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