India’s retail real estate market continued to attract occupier interest during the third quarter of 2026, with gross leasing volume reaching 2.22 million sq ft across the country’s eight major cities, according to Cushman & Wakefield’s Q3 Retail MarketBeat Report. While leasing declined 7.3% quarter-on-quarter and 4.4% year-on-year, year-to-date activity remained broadly stable at 6.57 million sq ft, registering a marginal 0.4% annual increase.
Main streets remained the preferred retail destinations, accounting for 67.9% of quarterly leasing at 1.51 million sq ft. Volumes on high streets increased 29.3% from the previous quarter and 33.1% annually. Mall leasing, meanwhile, stood at 0.71 million sq ft, representing 32.1% of total activity.
Domestic brands continued to dominate, contributing 86.3% of leasing at 1.92 million sq ft, while international retailers accounted for 13.7%. Delhi-NCR led city-wise demand with 0.55 million sq ft, followed by Hyderabad at 0.45 million sq ft and Mumbai at 0.35 million sq ft.
Fashion remained the largest leasing category with a 24.9% share, followed by food and beverage at 19.2% and accessories and lifestyle at 13.1%. Together, these segments represented 57.2% of quarterly leasing.
With no new Grade A mall supply added for the third consecutive quarter, quality space remained limited. Vacancy across Grade A malls fell to 4.8%, down from 5% in the previous quarter.
Prime high-street rents also strengthened, rising an average 2.1% quarter-on-quarter and 6.8% year-on-year. Mumbai locations including Linking Road, Chembur and Fort/Fountain recorded notable annual rental growth.
Looking ahead, approximately 12.7 million sq ft of Grade A mall space is expected to enter the market by 2028, potentially giving retailers greater scope for expansion.
Gautam Saraf, Executive MD–Mumbai and New Business, Cushman & Wakefield, said, “India’s retail market continues to demonstrate steady underlying occupier interest, even as quality retail space remains constrained.”
He added that the festive season could further strengthen consumer demand, while future retail success would increasingly depend on location, accessibility, quality and differentiated consumer experiences.
Source: Construction Week
