RETAIL LEASING ENDS 2025 ON A HIGH NOTE

India’s retail property market delivered a strong performance, hitting multi-year highs in annual absorption in 2025. Fashion, F&B and entertainment emerged as the year’s growth engines and the leasing momentum in retail properties was driven by expansion in lifestyle & experience-led categories, and improved supply of quality retail space across major cities According to Arjun Gehlot, Director, Ambience Malls, 2025 was the year organized retail truly recalibrated itself around performance, not just presence. “We saw a clear shift from expansion at-all-costs to smarter, yield-led leasing. Brands entering malls today are far more selective—they want the right adjacencies, defined catchments, and formats that drive repeat footfall rather than episodic spikes. In NCR, especially in Gurugram, well-positioned malls benefited from improving occupier confidence and stronger consumer spending, which translated into higher dwell t imes and healthier sales conversions. What stood out in 2025 was the growing role of food, entertainment and experiential zones as anchors rather than add-ons. Malls that invested early in design upgrades, tenant curation and operational efficiency outperformed the market. As we move into 2026, we foresee malls offering environments where brands can scale, engage and build long-term consumer loyalty.”

Nishank Joshi, Chief Marketing Officer, Nexus Select Malls agreed that 2025 has been a year of clear shifts in how India engages with retail and mall ecosystems. “We saw rapid digitization in advertising, with large-format digital installation screens and advanced facades redefining visibility for brands. As one of the earliest adopters of anamorphic advertising in India, Nexus Select Malls has revolutionized digital media inside malls and we’re now gearing up to scale this innovation with even more advanced formats. Each Nexus mall features a distinct, high-impact digital screen that has become a game changer- reshaping the advertising landscape, driving strong new revenue streams, and setting the stage for even bigger digital innovations in the year ahead. Customer behavior also evolved meaningfully with premiumization growing across categories, experiential formats becoming core traffic drivers, and data-backed insights helping us understand shoppers with far greater precision. Malls increasingly became social, cultural, and entertainment hubs, with stronger dwell times and a renewed sense of community. With the upcoming EOSS set to roll out, we anticipate strong shopper momentum across all 19 of our malls in 15 cities. Early indicators from brand partners and consumer sentiment point toward a high-engagement season. EOSS consistently energizes the retail ecosystem, and we expect this edition to further reinforce the growing confidence and appetite for organized retail in India. The year ahead promises to be one of acceleration- where innovation, customer centricity, and bold thinking will define how malls grow, how brands connect, and how India experiences retail.”

The Strong Year-End Closure

While high streets continue to see healthy traction, mall leasing activity that was earlier delayed due to limited availability of quality mall space is now finding opportunities in newly completed assets, helping malls regain their share. The improving supply environment has been a critical factor behind the step-up in leasing from ~7.8 MSF in 2024 to ~9.0 MSF in 2025, enabling retailers to finally execute expansion plans that had been on hold due to space constraints. This supply expansion is closely aligned with a clear trend of premiumization, as consumer preferences continue to shift towards experience-led retail and malls evolve into lifestyle destinations anchored by curated formats and premium brands. Platform-led partnerships and global brand rollouts further reflect rising discretionary spending and growing confidence in India’s consumption story.

The Momentum Only Strengthens

Tier I cities led the charge of tight vacancies and stronger rentals in premium, well-managed assets, but the growing appetite in select Tier II markets hinted at a broader structural upswing. More importantly, 2025 reaffirmed retail real estate’s relevance in an increasingly digital-first economy — proving that physical stores, when curated right, remain powerful brand theatres. As per Gautam Saraf, Executive Managing Director, Mumbai & New Business, Cushman & Wakefield, ”India’s retail real estate market is set to record its highest leasing activity since the pandemic, reaching nearly 9 MSF in 2025, driven by a strong year-end surge as new mall supply becomes operational in Q4. This sharp uptick underscores the catalytic role of fresh completions in unlocking pent-up demand and pushing absorption to record levels. With a robust pipeline lined up for 2026, the market is now entering a phase of meaningful capacity addition focused on higher-quality retail formats.”

Trends at the End of 2025

The rise of connected, app-led ecosystems are creating seamless end-to-end journeys for shoppers. Sustainability-led design and technology are shaping the next generation of assets. Retail-entertainment. evolve into more curated, content rich formats Emerging cities are set to drive the next wave of modern retail expansion. New revenue models, deeper brand collaborations, and phygital experiences will push the industry forward.