India's retail real estate market is poised for a gradual improvement in the availability of quality space, even as supply constraints persist in the near term, according to Cushman & Wakefield's Q2 Retail Market Beat Report. The report highlights a robust supply pipeline of 12.7 million square feet (MSF) slated for delivery between 2026 and 2028, which is expected to support occupier expansion plans over the medium term. Approximately 1.6 MSF of this supply is anticipated in the second half of 2026 alone.
Delhi NCR Leads Upcoming Supply
Delhi NCR is projected to account for more than half of the upcoming supply, followed by Bengaluru, Chennai, Kolkata, and Hyderabad. This concentration underscores the region's dominance in India's retail landscape.
"Looking ahead, the gradual addition of new supply combined with sustained consumption growth is expected to improve market availability of quality retail space and create fresh expansion opportunities for retailers," said Gautam Saraf, Executive Managing Director, Mumbai & New Business, Cushman & Wakefield.
Q2 2026 Leasing Momentum
The sector maintained its growth momentum in the second quarter of 2026, with gross leasing volume reaching 2.4 MSF across the top eight cities. This represents a 23.2% quarter-on-quarter (QoQ) increase and a 17.6% year-on-year (YoY) rise. Total leasing during the first half of 2026 hit 4.35 MSF, a 3.1% growth over the same period in 2025, reflecting steady demand despite ongoing supply constraints.
"India's retail real estate market continues to demonstrate the strength of underlying consumer demand," Saraf noted. "Even in an environment where quality retail supply remains constrained, occupiers have shown a clear willingness to compete for well-located assets, whether in premium malls or established high streets."
Malls Lead Leasing Activity
Malls led leasing in Q2 with a 51.3% share, accounting for 1.23 MSF. This marked a 33.4% QoQ increase and a 21.9% YoY rise, despite no new Grade A mall supply for the second consecutive quarter. Main Streets accounted for the remaining 48.7% (1.17 MSF), growing 14.0% QoQ and 13.3% YoY. Sustained demand, coupled with the absence of new supply, pushed Grade A mall vacancy down to 5.0%, a 163 basis points YoY decline, reinforcing landlord-favourable conditions.
Top Cities Driving Leasing
Delhi NCR, Mumbai, and Hyderabad together drove 64% of total Q2 leasing. Delhi NCR led with 0.67 MSF (28% share), followed by Mumbai at 0.50 MSF (21%) and Hyderabad at 0.37 MSF (15%). Ahmedabad posted the sharpest YoY jump at 164.0%, while Delhi NCR rose 123.0% YoY.
Retailer Categories and Rent Trends
Domestic retailers dominated leasing activity, accounting for 82.4% of total space taken, with a strong concentration in Main Streets. International retailers represented 17.6% of leasing, with 76% of their activity in malls. Among categories, fashion led demand at 28.2%, followed by food and beverage (F&B) at 17.2%.
Prime high-street rents rose 2.1% QoQ and 5.1% YoY. Notable increases included Mumbai's Linking Road, up 22% YoY, and Bengaluru's Indiranagar 100 Feet Road, up 12% YoY.
