India’s retail real estate market closed the third quarter of 2025 with a level of confidence that has been building for more than a year. What began as a slow return of shoppers to malls after the pandemic has now turned into full-throttle expansion by retailers hungry for quality space. The numbers tell the story clearly: India’s top seven cities recorded 3.2 million sq. ft of retail leasing between July and September, marking a sharp 65 percent jump from the same period last year. It’s the kind of growth the industry hasn’t seen in a while, and it signals how much retail appetite has strengthened across categories.
Delhi NCR and Hyderabad remained the two major engines of activity. Together, they accounted for 57 percent of all leasing done across the country this quarter. Delhi NCR alone cornered 35 percent of the total deals, powered by two new malls that opened their doors recently and managed to attract brands almost instantly. Hyderabad’s high streets, meanwhile, continued to draw interest from retailers looking for dense footfall and well-established neighbourhood shopping patterns.
This quarter’s performance also pushes the year-to-date story into more striking territory. Between January and September, retailers leased 8.9 million sq. ft in the top seven cities. That’s already higher than the total supply absorbed through all of 2024. Hitting 110 percent of last year’s annual total in just nine months makes 2025 one of the strongest years for retail real estate in recent memory.
The momentum did not rest entirely on malls. High streets kept pace, taking 41 percent of the leasing share, while malls contributed slightly over half. With a combined 1.5 million sq ft of new supply coming up in Delhi NCR and Hyderabad during the quarter, brands that were previously stuck waiting for suitable locations finally got the breathing room to open stores in areas they had been eyeing for a while. Supply shortages have been a recurring issue over the last few years, and the infusion this quarter came as a relief for retailers looking to scale.
The kind of brands taking up space presents an equally clear picture of where consumer demand is flowing. Fashion and apparel continued to dominate, contributing 35 percent of the leasing. Food and beverage followed at 16 percent, and daily needs and grocery accounted for 11 percent. Grocery chains, in particular, took up larger footprints, often stepping in as anchor tenants for premium retail developments. These anchors are a stabilising force for malls because they guarantee steady footfall and provide a reliable layer of consumption.
Direct-to-consumer brands are becoming a major force as well. Many of them started online but are now eager to strengthen their physical presence, especially in beauty, jewellery, wellness and fashion. The click-and-mortar approach, where brands maintain both online and physical storefronts—has moved from being a trend to a necessity for serious players, and this shift is visible in their leasing decisions across major cities.
Domestic retailers continued to lead the show. They leased 2.6 million sq. ft in Q3, which comes to a strong 76 percent year-on-year jump. International brands, while still active, captured a smaller share of around 19 percent. Luxury retailers, though limited in number, showed consistent growth, taking up 0.2 million sq. ft in the first nine months of 2025—a 19 percent rise compared with last year. Even with fewer new foreign luxury entrants this year, the leased area suggests steady confidence in India’s widening base of high-income consumers and the availability of better retail environments for flagship stores.
Looking ahead, signs point toward a record-setting year. With the market averaging between 2 and 2.5 million sq ft of leasing every quarter over the past eight quarters, projections indicate India could end 2025 with 10.5 to 11.5 million sq. ft of total retail leasing. That would easily surpass earlier estimates. Nearly 4.7 million sq. ft of fresh mall supply is expected in the final quarter alone, creating the conditions for one more strong surge before the year ends.
Over the longer term, the development pipeline remains busy. If current timelines hold, about 37 million sq ft of new malls may open across the top cities by 2029. Much of this supply will replace older retail assets, as developers upgrade or repurpose ageing spaces to match modern store formats and consumer expectations. Better-quality infrastructure and expanding omnichannel retail strategies suggest that the leasing momentum seen this year won’t fade quickly. India’s retail growth cycle appears to still have plenty of room to run, and Q3 offered a clear glimpse of the runway ahead.
