India's Retail Leasing Holds Steady in Q1 2026 Despite Supply Crunch

The report from commercial real estate services firm Cushman & Wakefield said leasing moderated 28 per cent quarter‑on‑quarter and 10 per cent year‑on‑year.

"This moderation follows a strong 2025, which recorded 9.21 million square feet of leasing, the highest annual performance in the post-COVID period, indicating that occupier interest remains intact despite near term supply constraints," the report said.

Despite the absence of new supply, mall leasing strengthened during the quarter, accounting for 47 per cent of total leasing activity, up from 33 per cent a year ago.

Main streets, meanwhile, continued to anchor overall leasing volumes, maintaining their dominant share at 53 per cent, supported by sustained demand for high‑visibility, consumption‑led locations.

"India's retail real estate market is currently operating in a demand‑led environment, where occupier interest continues to outpace the availability of high‑quality retail space," said Gautam Saraf, Executive Managing Director, Mumbai & New Business, Cushman & Wakefield.

"As new supply begins to enter the market from 2026 onwards, largely skewed towards premium developments, we expect this depth of demand to translate into more consistent leasing activity, while supporting the continued institutionalisation of India's retail real estate landscape," he added.

City‑level activity was concentrated in Delhi NCR, which led with a 30 per cent share at 0.59 million square feet, supported by sustained demand across both malls and main streets.

Hyderabad followed Delhi at 22 per cent (0.43 million square feet) and Mumbai ranked third at 13 per cent (0.25 MSF).

Fashion and food & beverage together contributed 46 per cent of total leasing, entertainment rose to an 11 per cent share largely in malls. Department stores accounted for 10 per cent of leasing, while furniture & furnishing contributed a 5 per cent share, with activity spread across both malls and main streets.

- IANS