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Malls Surge as India's Retail Sector Shifts Focus in Q2 2025
27 Jul
Summary
- Malls accounted for 45% of leasing volume in Q2 2025, up 42% quarter-on-quarter
- High streets continued to dominate with 55% of the market, despite a 26% decline
- Mall vacancy levels dropped to 8.16% in Q2 2025, with premium malls at just 4.28%
In the second quarter of 2025, India's retail sector witnessed a significant shift towards malls, with leasing in this segment rising by 42% compared to the previous quarter. Malls accounted for 45% of the total leasing volume during this period, the highest share in the past five quarters, signaling a growing preference for experience-driven, structured retail formats.
However, even with this surge in mall leasing, high streets continued to dominate the market, accounting for 55% of the total leasing activity. This underscores the persistent undersupply of quality mall stock across Indian cities.
The report also highlights the tightening of mall vacancy levels, which dropped by around 77 basis points to 8.16% in Q2 2025. Premium Grade-A+ or superior malls saw even tighter vacancies, at just 4.28%. This reflects the growing demand for high-quality retail assets and further strengthens the leverage of landlords in prime locations.
Looking ahead, the industry remains optimistic, with nearly 4 million square feet of new Grade A mall supply expected in the second half of 2025, particularly in key metros like Mumbai, Delhi-NCR, and Hyderabad. This influx of new retail space is likely to cater to the increasing demand from both domestic and international brands seeking structured environments and curated customer experiences.
