India’s retail real estate market is projected to reach 9 million square feet of leasing by the end of 2025, a significant increase from 7.8 million square feet in 2024, marking the highest annual absorption post-pandemic, as per a report by Cushman & Wakefield. The report anticipates a further strengthening of retail leasing momentum in 2026, with a total demand expected to range between 10 to 11 million square feet. This growth will be fueled by enhanced availability of quality mall space and the release of pent-up demand due to limited supply.
The upcoming mall pipeline for 2026 is estimated at approximately 5.9 million square feet, with around 76% expected to be Grade A+ assets. This development is set to offer expanded choices for retailers in key cities like Bengaluru, Chennai, Mumbai, and Hyderabad. The influx of new supply is forecasted to alleviate the tight vacancies and facilitate a healthier growth phase driven by expansion rather than space constraints, according to the firm.
Despite the scarcity of malls, high-street leasing, which gained prominence, is anticipated to remain stable in 2026 alongside the improvement in mall absorption. Gautam Saraf, Executive Managing Director of Mumbai & New Business at Cushman & Wakefield, emphasized the pivotal role of fresh completions in boosting absorption levels to record highs in 2025. With a robust pipeline for 2026, the market is poised for a significant capacity addition focused on higher-quality retail formats.
The report also points out that the retail real estate sector witnessed a surge in new deliveries in 2025, closing at around 4.3 million square feet, a substantial increase from the 0.9 million square feet of Grade A mall completions in 2024. Fashion, food and beverage, and entertainment sectors remained the key drivers of demand in 2025. Looking ahead to 2026, the trend of premiumization is expected to gain strength, supported by a broader pipeline of global brand rollouts, platform partnerships, and the supply of high-quality malls.
