Retail leasing up 45% in Q3 2025 led by fashion, F&B and entertainment

India's retail real estate leasing rose 45% YoY to 2.41 msf in Q3 2025, driven by strong occupier demand from fashion, food and beverage, and entertainment categories

India’s retail real estate sector recorded a gross leasing volume (GLV) of 2.41 million sq ft (msf) across the top eight cities in the third quarter of 2025 (Q3 2025), up 45.2 per cent year-on-year (YoY), driven by strong demand from the fashion, food and beverage (F&B), and entertainment segments, according to a report by Cushman & Wakefield.

 

Category-wise, fashion accounted for 21.4 per cent of leasing, F&B for 19.3 per cent, and entertainment for 15.8 per cent, emerging as major demand drivers.

 

Quarter-on-quarter (QoQ), overall leasing grew by 7.6 per cent, underscoring continued strength. In the first nine months of 2025 (9M 2025), leasing volumes reached 7.02 msf, reflecting a 25.2 per cent YoY growth. At this pace, the sector is expected to surpass the 2024 full-year GLV of 7.88 msf, highlighting steady occupier demand and sustained momentum across both high streets and malls.

 

Malls, high streets share demand evenly

 

In the third quarter, malls absorbed 1.16 msf of retail space, accounting for 48 per cent of total leasing, while high streets made up the remaining 52 per cent with 1.25 msf leased.

 

This was the second consecutive quarter without any new grade-A mall completions, keeping new supply for the year till September at 1.3 msf. The limited supply pushed vacancy levels down 91 basis points (bps) QoQ to 7.25 per cent, with vacancy levels in grade A+ malls dipping further by 45 bps to 2.27 per cent. This, the report noted, highlights the growing need for fresh inventory.

 

Malls’ rental growth remained flat QoQ, while high streets registered a modest 1 per cent quarterly uptick.

 

Domestic retailers dominate activity

 

Domestic retailers continued to dominate leasing activity with an 82.5 per cent share, reflecting the strength and expansion of home-grown brands. International players accounted for 17.5 per cent, primarily focusing on malls to leverage higher visibility and professional management.

 

Mumbai, Delhi NCR and Hyderabad lead

 

City-wise, Mumbai, Delhi NCR and Hyderabad led the leasing activity in Q3 2025. Mumbai accounted for a 24.5 per cent share (0.6 msf), while Hyderabad and Delhi NCR followed closely at 21 per cent each (0.51 msf). Together, these three markets captured nearly two-thirds of the year-to-date leasing volumes.