Hyderabad Leads India Retail Leasing Growth

Record Retail Leasing Performance

India’s retail real estate sector achieved a record leasing volume of 8.9 million square feet in 2025, marking the highest level recorded in recent years. The article attributes this performance to improving consumer demand, retailer expansion plans, and growing confidence in physical retail formats across major urban centres.

Hyderabad Emerges as the Leading Market

Hyderabad accounted for the largest share of retail leasing activity during the year, outperforming other metros. The city’s combination of strong residential growth, rising disposable incomes, and a robust supply of quality retail space supported sustained leasing. This performance reinforces Hyderabad’s position as a key consumption-driven real estate market.

Contribution from Other Major Cities

Apart from Hyderabad, cities such as Delhi NCR, Mumbai, Bengaluru, and Chennai also recorded healthy retail leasing volumes. These markets benefited from mall completions, redevelopment of existing retail assets, and steady demand from domestic and international brands seeking to expand their footprint.

Retailer Expansion and Category Mix

Leasing demand was driven by a broad mix of retailers, including fashion, food and beverage, electronics, and lifestyle brands. Both Indian and global retailers pursued physical store expansion as part of omnichannel strategies, supporting balanced demand across categories rather than reliance on a single segment.

Mall and High Street Performance

Grade A malls continued to attract the majority of leasing activity, supported by high footfall and organised management. Prime high streets also saw increased interest, particularly from food and beverage and convenience retail formats. Well-located assets with strong catchment areas benefited from stable occupancy levels.

Supply Additions and Asset Quality

New retail supply additions in 2025 focused on experiential formats that integrate dining, entertainment, and community spaces. Developers increasingly emphasised design quality and tenant mix to enhance footfall and dwell time, aligning with evolving consumer preferences.

Rental Trends and Occupier Confidence

Rental values in prime retail locations remained largely stable, with selective upward movement in high-demand micro markets. Retailers demonstrated willingness to commit to longer lease tenures in proven locations, reflecting confidence in store-level profitability and demand sustainability.

Investor Perspective on Retail Assets

The record leasing volume has strengthened investor confidence in retail real estate as a core commercial asset class. Institutional investors continue to focus on well-performing malls and prime high street assets offering predictable cash flows and long-term value potential.

Outlook for Retail Real Estate

The article suggests that retail leasing momentum is likely to remain steady, supported by consumption growth, urbanisation, and improving quality of retail infrastructure. While growth may normalise from record levels, fundamentals indicate a structurally positive outlook for organised retail real estate.

Conclusion

India’s retail leasing reached a record 8.9 million sq ft in 2025, highlighting the sector’s recovery and expansion. With Hyderabad leading the market and other metros contributing steadily, retail real estate has reinforced its role as a resilient and consumption-driven component of the commercial property landscape.

Enjoyed this update? Visit PropTech Pulse for more real estate news and market insights.