Retail leasing in India is witnessing a robust resurgence, signaling a renewed confidence in physical retail spaces across the country’s urban landscape. According to Cushman & Wakefield, leasing activity across malls and high streets in the top eight Indian cities surged by approximately 45% year-on-year in the third quarter of 2025, reaching around 2.41 million square feet. This resurgence is not merely a function of increased volume but also reflects a qualitative shift in the retail real estate market. Mumbai, Bengaluru, and Pune have emerged as notable outliers, exhibiting particularly strong growth trajectories. This trend underscores the shifting dynamics in consumer behaviour, real estate strategy, and urban development, as India’s retail sector recalibrates itself in a post-pandemic, digital-first economy.
The composition of leasing activity reveals much about the evolving retail landscape. Anchor tenants in food, athleisure, beauty, and electronics categories are leasing larger spaces with longer tenure commitments, indicating a strategic bet on the enduring value of physical presence. Fit-outs are becoming more standardised, which not only streamlines the tenant onboarding process but also reduces costs and accelerates store openings. Increasingly, retail premises are designed with energy-efficient shells, which serve to cut operating expenses—a critical consideration as footfall recovers to pre-pandemic levels. This evolution reflects a broader recognition that bricks-and-mortar outlets are no longer antagonistic to e-commerce but rather function as integral components of an omni-channel retail strategy. They act as showrooms for product discovery, service centres for customer support, and last-mile delivery nodes, complementing the digital experience rather than competing with it
Underlying this retail renaissance is an improvement in urban infrastructure and logistics, which enhances the viability and attractiveness of physical retail locations. The expansion of expressways and freight corridors is reducing replenishment times, enabling retailers to maintain optimal inventory levels with greater efficiency. Warehousing hubs are increasingly located closer to city cores, minimising split shipments and facilitating faster delivery cycles. Mall operators have adapted to changing market demands by assuming a more active, operational role rather than remaining passive landlords. They now integrate loyalty programmes, returns management, and experiential events into their omni-channel offerings, thereby increasing customer engagement and retailer profitability. These strategic moves are helping malls to reinvent themselves as community hubs and entertainment destinations, beyond their traditional function as mere retail aggregators.
The first half of 2025 had already set records for retail leasing volumes, and the strong performance in Q3 confirms the sector’s resilience and stamina. This momentum is likely to be sustained if city planning authorities continue to implement transit-oriented development (TOD) policies and simplify regulatory processes related to signage and licensing. Such reforms would facilitate the addition of retail stock without triggering the speculative excesses observed in previous real estate cycles, which often led to oversupply and subsequent market corrections. The current phase of retail expansion, therefore, appears more measured and demand-driven, reflecting a maturing market that is increasingly responsive to consumer needs and urban realities.
The resurgence of retail leasing in India can also be viewed within the broader context of urban development and demographic shifts. India’s middle class continues to expand, with rising disposable incomes and evolving consumer preferences driving demand for experiential retail formats. Urbanisation trends reinforce this demand, as more people migrate to cities in search of employment and improved living standards. Retail spaces that offer convenience, lifestyle experiences, and curated product assortments are well-positioned to capture this growing market. The integration of digital technologies in retail spaces further enhances their appeal, allowing retailers to personalise customer interactions and optimise inventory management. For instance, many retailers now use data analytics to tailor in-store promotions and streamline supply chains, thereby improving operational efficiency and customer satisfaction.
Moreover, the rise of specialised retail sectors such as athleisure and beauty highlights changing consumer lifestyles and health-conscious trends. These categories tend to demand larger, more customised store formats that enable immersive brand experiences. Food and electronics remain steady anchors due to their essential nature and high footfall draw, but they too are evolving to offer integrated services like ready-to-eat options and tech support centres. This diversification in tenant mix not only enhances the attractiveness of retail destinations but also stabilises leasing income by reducing dependence on any single sector. Retail landlords and developers are therefore investing in flexible, multi-purpose spaces that can adapt to shifting consumer and tenant requirements over time.
The retail real estate market’s current trajectory also reflects a broader global shift in how physical retail is perceived and utilised. Whereas earlier decades saw bricks-and-mortar stores primarily as sales points, contemporary retail spaces are increasingly viewed as experiential environments designed to deepen customer engagement and brand loyalty. This shift has spurred investment in amenities such as augmented reality (AR) fitting rooms, interactive product displays, and integrated digital payment systems. Indian malls and high streets are beginning to incorporate these innovations, aligning themselves with global best practices and enhancing competitiveness. Additionally, sustainability considerations are becoming integral to retail development, with green building certifications and energy-efficient design elements gaining prominence. These features appeal not only to environmentally conscious consumers but also to tenants seeking to reduce operational costs and comply with emerging regulatory standards.
Furthermore, the public policy environment plays a crucial role in shaping the future of retail leasing in Indian cities. Local governments that prioritise transit-oriented zoning and streamline bureaucratic approvals create a more conducive environment for retail expansion. Efficient public transportation networks increase accessibility to retail hubs, boosting footfall and tenant revenues. Simplified signage and licensing regulations reduce entry barriers for retailers and encourage experimentation with new formats and concepts. Such policies foster a competitive yet sustainable retail ecosystem that benefits consumers, landlords, and tenants alike. As India’s urban centres continue to grow and modernise, the alignment of regulatory frameworks with market realities will be pivotal in maintaining the positive momentum in retail real estate.
In conclusion, the surge in retail leasing across Indian cities is a clear indicator of Main Street’s return to prominence in the country’s commercial landscape. This revival is characterised not only by increased square footage leased but also by improved quality of tenants, longer lease terms, and a strategic embrace of omni-channel retailing. The interplay of enhanced infrastructure, innovative mall management, evolving consumer preferences, and supportive public policies has created a fertile ground for sustainable retail growth. As consumption patterns continue to evolve and urbanisation accelerates, physical retail spaces will remain vital nodes in India’s retail ecosystem—complementing rather than competing with digital channels and serving as experiential hubs that enrich the consumer journey. The retail renaissance underway thus promises to reshape India’s urban commercial fabric for years to come, reflecting a balanced synthesis of tradition and innovation.
Leasing +45% YoY (Q3-2025): ~2.41 mn sq ft across top eight cities.
Quality over quantity: Strong anchors, longer terms, greener shells.
Omni-channel by design: Malls as complements to e-commerce, not competitors.