July 27, 2025, New Delhi: There has been a big change in lease activity in India’s retail industry in the second quarter of 2025, showing that people are once again preferring malls. The most recent “Q2-2025 Retail Market Beat Report” from Cushman & Wakefield says that while high streets still have a bigger total share, mall leasing has gone up a lot, showing that there is a growing need for organized and experience-driven shopping areas.
According to the research, leasing on high streets fell by 26% from one quarter to the next (q-o-q) in Q2 2025. Despite this drop, high streets still held the largest share of the market, with 55% (1.23 million square feet – MSF) of all lease volume. This was mostly because there was still a lack of good mall space in Indian towns.
On the other hand, malls made up 45% of all leasing activity in Q2 (1.01 MSF), which was a huge 42% increase from the previous quarter and the biggest mall share in the preceding five quarters. This rise shows that people clearly prefer organized retail locations that give them a customized shopping experience.
Tightening vacancy rates show that there is even more demand for high-end mall space. There were no new malls built in the second quarter of 2025, and only 1.3 MSF of Grade A malls were finished in the first half of 2025. As a result, the overall number of empty mall spaces fell by about 77 basis points to 8.16% in the second quarter of 2025. Even more importantly, premium Grade-A+ or better malls had even fewer vacancies, at only 4.28%. This shows how much demand there is for high-quality retail space and gives landlords more power in good locations.
Average rents on main streets stayed the same from quarter to quarter, but they went up by a healthy 6% from year to year (y-o-y). This shows that demand for key high street locations is still strong, even though the overall volume of leases has gone down.
Suvishesh Valsan, Head of Research India at Cushman & Wakefield, said, “High streets remained the main driver of activity, while vacancy rates in Grade-A malls have dropped even more. This shows a clear and growing preference for high-quality, experience-led retail spaces.” We are still hopeful about the future. In the second half of the year, there would be around 4 MSF of new Grade A supply, especially in major cities like Mumbai, Delhi-NCR, and Hyderabad.
Valsan also said that multinational brands are becoming more interested and that leasing is going up sharply in categories like wellness and groceries. He thinks this shows that India’s buying patterns are changing more broadly.
Domestic retailers still had the most leasing volume, with an 86% share (1.93 MSF). But there was also a big rise in the number of overseas retailers who took part, whose share went from 8.5% to 14% with 0.31 MSF of lease activity. Malls were a big part of this rise for multinational brands since they are their favorite type of organized setting for brand awareness and curated consumer experiences.
Hyderabad, Mumbai, and Delhi-NCR were the best-performing markets, making up more than 70% of all leasing activity in Q2. Hyderabad had the most, with 0.76 MSF, followed by Mumbai with 0.52 MSF and Delhi-NCR with 0.3 MSF. Pune (0.23 MSF), Bengaluru (0.18 MSF), Chennai (0.16 MSF), Kolkata (0.05 MSF), and Ahmedabad (0.04 MSF) were also important marketplaces.