Mall leasing declined to 0.71 MSF in Q3 2026, while no new Grade A mall space was added for the third consecutive quarter despite continued retailer demand
Mall leasing in India fell 42.1 per cent quarter-on-quarter (QoQ) in the July-September quarter as retailers faced limited availability of quality shopping-centre space. Leasing in malls stood at 0.71 million square feet (MSF), down 37.8 per cent from a year earlier, while no new Grade A mall space was added across the top eight cities for the third consecutive quarter, according to Cushman & Wakefield’s Q3 Retail MarketBeat Report.
The decline in mall leasing came despite continued retailer demand, with the shortage of quality space pushing more activity towards prominent high streets. High-street leasing rose 29.3 per cent QoQ and 33.1 per cent year-on-year (YoY) to 1.51 MSF, accounting for 67.9 per cent of total retail leasing during the quarter.
Overall retail leasing across the eight major cities stood at 2.22 MSF in Q3, down 7.3 per cent QoQ and 4.4 per cent YoY. However, leasing during the first nine months of 2026 reached 6.57 MSF, marginally higher than the corresponding period last year, indicating that retailer expansion remained broadly steady despite the quarterly moderation.
“India’s retail market continues to demonstrate steady underlying occupier interest, even as quality retail space remains constrained,” Gautam Saraf, Executive Managing Director – Mumbai & New Business, Cushman & Wakefield, said, adding that the absence of new Grade A mall supply for three consecutive quarters was increasingly influencing the pace of leasing activity.
Domestic retailers accounted for 86.3 per cent of total leasing in Q3, with volumes of 1.92 MSF. International retailers made up the remaining 13.7 per cent, or 0.30 MSF, pointing to continued expansion by Indian brands alongside selective activity from global retailers.
Delhi NCR Leads Retail Leasing
Delhi NCR recorded the highest retail leasing among the eight cities at 0.55 MSF during Q3, followed by Hyderabad at 0.45 MSF and Mumbai at 0.35 MSF. Together, the three markets accounted for 61 per cent of total retail leasing during the quarter, although their performances varied significantly.
Hyderabad recorded a 22 per cent QoQ increase and an 18.3 per cent YoY rise in leasing. Delhi NCR declined 17.7 per cent QoQ but remained 7.9 per cent higher YoY, while Mumbai recorded a sharper 29.5 per cent QoQ decline and a 40.8 per cent YoY fall.
Bengaluru recorded 0.24 MSF of leasing, followed by Pune at 0.21 MSF and Chennai at 0.18 MSF. Ahmedabad recorded 0.13 MSF, while Kolkata accounted for 0.10 MSF during the quarter.
Fashion, F&B Drive Demand
Fashion remained the biggest source of retailer demand in Q3, accounting for 24.9 per cent of total leasing. Food and beverage (F&B) followed with 19.2 per cent, while accessories and lifestyle accounted for 13.1 per cent. Together, the three categories contributed 57.2 per cent of leasing during the quarter.
Department stores and entertainment were also significant contributors, accounting for 7.8 per cent and 7.5 per cent of leasing, respectively. The mix indicates that demand continued to come from both traditional retail categories and businesses focused on consumption and experiences.
The limited availability of quality mall space was reflected in the broader retail market, with vacancy declining 20 basis points QoQ to 4.8 per cent from 5 per cent in the previous quarter. At the same time, prime high-street rents increased 2.1 per cent QoQ and 6.8 per cent YoY, with key locations in Chennai, Mumbai and Delhi NCR recording strong annual rental growth.
12.7 MSF Mall Supply Expected By 2028
The supply situation could gradually improve as new mall projects become operational. Around 12.7 MSF of Grade A mall space is expected to be added across the top eight cities through 2028, with Delhi NCR expected to lead the pipeline, followed by Bengaluru and Chennai. Around 1.35 MSF of this supply is expected to be completed in 2026, with the remaining projects scheduled through 2028.
The additional space could give retailers more opportunities to expand in malls after several quarters of limited new supply.
Milin Rohinesh, Head of Retail-India, Cushman & Wakefield, said, “The definition of quality retail itself is also evolving, with greater emphasis on well-positioned, experience-led destinations that bring together the right tenant mix and consumer experience.”
Rohinesh said retail demand remained broad-based during the quarter, with fashion, F&B and lifestyle accounting for more than half of quarterly leasing. He also pointed to continued expansion by home-grown brands and activity from international retailers in the premium and luxury segments.
The report said the upcoming supply could provide greater room for brands to expand and address demand that has been constrained by limited availability. However, the performance of individual malls is likely to remain dependent on location, accessibility, tenant mix and the overall consumer experience.
