Retail sector sees 2.4 mn sq ft leasing in Q1 2025 across eight cities, marking a 55% YoY increase

Retail leasing activity in Q1 2025 reached 2.4 million sq ft across the top eight cities, marking a 55% year-on-year (YoY) growth and a 6% quarter-on-quarter (QoQ) increase. Hyderabad led with 34% (0.8 MSF) of the total leasing volume, experiencing a 106% YoY growth, according to a report by Cushman & Wakefield released on April 8.

In its Q1-2025 Retail MarketBeat Report released on April 8, real estate consultant Cushman & Wakefield noted that leasing of retail spaces increased to 2.4 million sq ft in January-March this year, up from 1.56 million sq ft in the year-ago period.

It said that both malls and main streets contributed to this growth owing to the commencement of new supply in emerging locations.

The report highlighted that Hyderabad was the frontrunner in terms of leasing volume, contributing 34% (0.8 mn sq ft) of the total leasing activity, with a staggering 106% yoy growth. Besides the prominent high streets such as HITEC City and Jubilee Hills, certain emerging high streets such as Kothapet, Secunderabad, Boduppal and Kompally also contributed immensely to leasing.

Mumbai followed closely, accounting for 24% (0.58 mn sq ft) of the total leasing volume and recorded a 259% yoy growth, largely owing to the emergence of new high street locations and the addition of new mall supply.

Delhi NCR also saw significant traction, capturing 17% (0.41 mn sq ft) of the total leasing share, supported by strong demand in key submarkets and a 57% yoy increase. Retail activity here was largely led by premium brands, dining and entertainment concepts, reinforcing its status as a high consumption market.

Bengaluru and Chennai, meanwhile, exhibited stable yoy growth numbers with 0.19 MSF and 0.17 mn sq ft of leasing respectively.

Main streets continue to dominate the leasing landscape

The report also observed that main streets continued their domination of the leasing landscape, accounting for 2/3rd of the total leasing volume at 1.69 mn sq ft, with premium high street locations in Delhi NCR, Mumbai, Bengaluru and Hyderabad witnessing heightened interest from retailers.

Mall leasing, meanwhile, stood at 0.72 mn sq ft for the quarter. Notably, Mumbai witnessed the highest lease share of 44% in malls at 0.31 mn sq ft. This was triggered by two Grade A malls becoming operational in the city, adding 1.3 mn sq ft to India’s Grade A mall inventory, now standing at around 63 mn sq ft.

In terms of category demand, the report observed that entertainment and fashion were the biggest space consumers in malls, capturing a 34 % leasing share at 0.35 mn sq ft, whereas fashion and F&B were most prevalent in main streets across the top-8 cities with 0.80 mn sq ft of leasing volume.

Additionally, foreign brands accounted for around 8% of the transaction volumes to partake in India’s growing consumption story, while domestic brands drove over 92% of leasing activity, highlighting the strength of the homegrown retail expansion.

Looking ahead, mall leasing activity is expected to further pick up with close to 6.4 mn sq ft of new mall supply expected across the top 8 cities by the end of 2025, 58% of which will be Grade A+.

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Saurabh Shatdal, Managing Director, Capital Markets and Head-Retail, India said, “India’s retail sector is evolving at a dynamic pace, and the strong leasing activity in Q1 2025 reflects growing market confidence. We’re seeing a clear trend where retail demand is following new, quality supply—cities with fresh developments are witnessing heightened transaction volumes.”

Beyond traditional malls, new retail hubs are emerging within mixed-use developments, including office and residential complexes. With close to 7 million square feet of new supply expected over the next three quarters—largely comprising premium Grade A malls—we expect this positive momentum to continue well into the year, he said.