India Retail Leasing Touches 2.22 Million Sq Ft in Q3 2026: Report

India’s retail real estate sector continued to see active occupier demand in Q3 2026 with gross leasing volume (GLV) reaching 2.22 million square feet (MSF) across the top eight cities, a report said on Thursday. The report from Cushman & Wakefield said leasing moderated by 7.3 per cent quarter-on-quarter (QoQ) and 4.4 per cent year-on-year (YoY). Retail leasing reached 6.57 million sq ft year-to-date (YTD), remaining broadly stable YoY with a 0.4 per cent increase, indicating sustained retailer demand even as the market saw no new Grade A mall supply for the third consecutive quarter.

Main streets led leasing activity, accounting for 67.9 per cent of total volumes at 1.51 MSF, up 29.3 per cent QoQ and 33.1 per cent YoY, supported by demand for prominent, high-visibility retail locations, the report said. Mall leasing accounted for the remaining 32.1 per cent and stood at 0.71 million sq ft, with volumes declining 42.1 per cent QoQ and 37.8 per cent YoY, while availability of quality mall space remained constrained. Nearly 12.7 million sq ft of Grade A mall supply is expected through 2028, which will gradually improve the availability of quality retail space across key markets, the report forecasted.

The pipeline will be led by Delhi NCR, followed by Bengaluru and Chennai, with approximately 1.35 MSF projected for completion in 2026. “India’s retail market continues to demonstrate steady underlying occupier interest, even as quality retail space remains constrained. While leasing moderated during the quarter, year-to-date activity remains largely in line with last year, with a slight increase,” said Gautam Saraf, Executive Managing Director – Mumbai & New Business, Cushman & Wakefield, said.

The previous three consecutive quarters saw zero new Grade A mall supply, indicating that limited availability is increasingly influencing the pace of leasing. “As we enter the festive period, we expect strong consumption sentiment to provide an additional tailwind for retailers and reinforce the underlying demand environment,” he added. On the supply side, Grade A mall vacancy has tightened to below 5%, underscoring the limited availability of quality space.

Domestic retailers maintained their dominant position during the quarter, accounting for 86.3 per cent of leasing activity at 1.92 MSF, reflecting continued expansion by home-grown brands. International retailers accounted for the remaining 13.7 per cent with leasing volumes of 0.3 million sq ft. Delhi NCR, Hyderabad and Mumbai collectively accounted for 61 per cent of overall activity. Delhi NCR led with 0.55 MSF and a 24.9 per cent share, followed by Hyderabad at 0.45 MSF and Mumbai at 0.35 MSF.

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