India’s retail real estate sector recorded strong growth in the second half of 2025, with total absorption reaching approximately 4.3 million sq. ft. across the top seven cities. This performance reflects sustained demand from retailers and growing confidence in physical retail formats.
One of the key trends driving this growth is the rising prominence of high-street retail. Due to limited availability of premium mall spaces, brands are increasingly shifting towards high-footfall high-street locations. This has led to rental appreciation in prime high-street markets, while mall rentals have remained largely stable except for select premium developments.
The demand was largely driven by apparel brands, followed by segments such as food & beverage, entertainment and hypermarkets. This shift indicates a growing focus on experience-led retail, where brands aim to offer more engaging and immersive shopping environments to attract consumers.
Mid-sized retail spaces ranging between 1,000 to 5,000 sq. ft. dominated leasing activity, showcasing a preference for flexible and cost-effective store formats. On the supply front, cities like Delhi-NCR and Hyderabad are expected to lead upcoming retail developments, indicating strong future growth potential.
Overall, India’s retail sector continues to evolve with changing consumer preferences, increased demand for experiential shopping and a notable shift towards high-street retail formats.
