India’s retail leasing slips 6.3% in Q2 2025; malls see strong rebound

India’s top eight metros recorded around 2.24 million square feet (MSF) of retail space leasing in Q2 2025, reflecting a 6.3% year-on-year (YoY) decline, according to a Cushman & Wakefield report. These eight cities included Ahmedabad, Bangalore, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai, and Pune.

While the report does not state the possible reasons for the yearly and quarterly decline, it states that overall, in the first half, leasing volumes reached 4.61 MSF, up 17% YoY, indicating sustained retailer demand amid limited new supply.

Of the combined retail space leased in the quarter, the report revealed that malls accounted for 45% of Q2 leasing activity (1.01 MSF), up 42% sequentially and marking the highest mall share in five quarters. No new supply was added during the quarter, pushing overall mall vacancy down by 77 basis points to 8.16%. Superior-grade malls witnessed tighter vacancies at 4.28%, reflecting strong demand for quality retail spaces.

Across cities, Hyderabad led mall leasing at ~0.8 MSF, with vacancy in superior malls at just 1.85%, followed by Mumbai which registered a 1.6X y-o-y growth despite a significant 10% of quarterly decline. The city also saw the highest overall vacancy which rose to 7.9% due to relocations.

Meanwhile, high streets contributed 55% of total leasing yet, saw a whopping 26% quarterly decline. Persistent undersupply of mall space continues to buoy demand for high street locations. Rents remained stable sequentially but were up 6% y-o-y.

“High streets remained the dominant driver of activity, while vacancy levels in Grade-A malls have tightened further – reflecting a clear and growing preference for high-quality and experience-led retail spaces,” said Suvishesh Valsan, Head, Research India at Cushman & Wakefield, in a statement.

Domestic retailers maintained a dominant 86% share of leasing activity (1.93 MSF). International brands increased their share to 14% (0.31 MSF), up from 8.5% in Q1, with most opting for mall locations.

“What’s also noteworthy is the growing interest from international brands and the sharp uptick in leasing across categories like wellness and grocery — both of which signal a broader shift in India’s consumption landscape. As new supply comes online, we expect leasing momentum to further accelerate, particularly in top-tier urban markets,” Valsan added.

Food & Beverage and Fashion categories led demand, together accounting for over 50% of leasing (1.17 MSF). Wellness leasing reached 0.18 MSF seeing a two-fold surge on yearly basis.