Retail space leasing across India’s eight major cities declined nearly 5% year-on-year in the September quarter, while high-street leasing rose 33%, highlighting how limited premium mall availability is reshaping retailers’ expansion strategies.

Mall Leasing Declines Amid Limited Availability of Quality Space

Leasing of retail space in shopping malls across eight major Indian cities fell 38% year-on-year to 0.71 million square feet in July–September 2026, according to data from real estate consultancy Cushman & Wakefield. The decline comes amid limited availability of quality retail space, even as retailers continue to show interest in expanding their physical presence.

The eight markets covered in the report are Mumbai, Delhi-NCR, Chennai, Kolkata, Bengaluru, Hyderabad, Pune and Ahmedabad.

Despite the drop in mall leasing, the broader retail property market recorded a more moderate decline. Combined gross leasing across shopping malls and high-street locations fell nearly 5% to 2.22 million square feet in the September quarter, compared with 2.33 million square feet in the corresponding period a year earlier.

The divergence between mall and high-street performance suggests that retailers are adapting their location strategies to the availability of suitable properties. Rather than indicating a uniform decline in demand for physical retail space, the figures point to a market in which the type and location of available space are influencing leasing activity.

High-Street Leasing Rises 33% as Retailers Seek Alternatives

High-street retail locations recorded stronger activity during the quarter. Gross leasing in these areas increased 33% year-on-year to 1.51 million square feet, according to Cushman & Wakefield.

High streets generally consist of retail premises along prominent urban roads, commercial districts and established shopping corridors. These locations can offer direct street visibility, access to local consumers and opportunities for brands to establish stores without relying on space inside a shopping mall.

High-street properties accounted for 68% of total retail leasing across the eight cities during the September quarter, while shopping malls contributed the remaining 32%.

The shift reflects the growing importance of alternative retail formats as premium mall space becomes harder to secure. For brands seeking new outlets, well-positioned high-street properties can provide access to established consumer catchments and everyday footfall.

However, high-street locations and shopping malls serve different purposes. Their relative suitability depends on the brand, target customers, store format, rental economics and the shopping experience a retailer wants to provide.

No New Mall Openings Add to Supply Constraints

According to Cushman & Wakefield, the eight cities did not witness any new shopping mall openings during the January–September period. The lack of fresh mall supply has limited the options available to retailers seeking modern, well-located commercial space.

Gautam Saraf, Executive Managing Director, Mumbai & New Business at Cushman & Wakefield, said the market continued to demonstrate underlying occupier interest despite constraints in the availability of quality retail space.

He also noted that total leasing during the first nine months of 2026 increased marginally, even without new mall openings across the covered markets.

The supply constraint is particularly relevant for brands that require specific locations, floor areas, layouts and customer access. When suitable properties are unavailable, retailers may postpone expansion, compete more intensely for existing space or shift their attention to high-street locations.

The situation also means that headline leasing figures need to be interpreted alongside the amount and quality of space entering the market.

Grade A Mall Vacancy Falls Below 5%

The availability of premium mall space has tightened, with vacancy levels in Grade A malls falling below 5%, according to Cushman & Wakefield.

Low vacancy limits the number of immediately available units and can make it harder for new entrants or expanding retailers to secure preferred locations. Established malls may remain attractive because they offer a combination of organised retail, dining, entertainment and other consumer services within a single destination.

Shriram PM Monga, co-founder of property consultancy SRED Global, said the shortage of quality mall space was encouraging retailers to turn towards high streets. He highlighted the significance of high-street locations in the National Capital Region (NCR), where Grade A mall vacancy was cited at 4.8%.

Monga said a well-located high-street store can offer brands strong visibility and direct consumer access. He also noted that the best retail addresses are being priced accordingly.

The figures underline the importance of location selection in retail expansion. While premium malls offer a managed environment and a broader shopping experience, high streets can provide a more direct connection with neighbourhoods and established commercial areas.

12.7 Million Square Feet of New Mall Supply Expected by 2028

The market could see a change in supply conditions as new developments enter the pipeline. Cushman & Wakefield estimates that 12.7 million square feet of new retail space is expected to be added through 2028.

Saraf said this planned supply could create more room for retailers to expand and help unlock demand currently constrained by the limited availability of suitable properties.

The impact will depend on when projects are completed, their locations, the quality of the developments and how much space becomes available for leasing. New supply does not automatically translate into immediate occupancy, as developers and retailers must agree on rental terms, store configurations and commercial viability.

Nevertheless, the pipeline could provide additional options for brands that have struggled to secure space in established malls. It may also give retailers greater flexibility to choose locations based on customer reach and operating requirements rather than availability alone.

For developers, the challenge will be to deliver projects that attract tenants and maintain occupancy. For retailers, a wider choice of properties could support expansion plans, although decisions will continue to depend on expected sales, rental costs and the economics of each location.

January–September Leasing Edges Higher Despite Quarterly Decline

Despite the fall in the September quarter, total retail space leasing across the eight cities rose marginally to 6.57 million square feet during January–September 2026.

The nine-month figure provides a broader view of activity than the latest quarterly data. While mall leasing weakened sharply in July–September, the increase in high-street leasing helped limit the decline in combined leasing during the quarter.

Cushman & Wakefield also reported that leasing activity declined only in Mumbai and Pune among the eight cities, while the remaining six markets recorded an upward trend.

This variation indicates that retail property conditions are not uniform across major urban markets. Local supply, consumer catchments, rental levels and the availability of suitable properties can all influence where brands choose to expand.

For property owners and investors, the distinction between quarterly and year-to-date performance is important. A weaker quarter may reflect supply constraints or the timing of transactions rather than a broad-based retreat from physical retail.

Why Malls and High Streets Can Complement Each Other

The latest figures point towards a retail property market in which malls and high streets increasingly serve complementary roles.

Shopping malls can offer retailers access to a concentrated consumer destination with multiple stores, food outlets, entertainment facilities and shared amenities. High-street stores, meanwhile, can provide visibility along busy roads and access to customers in established commercial or residential districts.

Monga said brands increasingly need the right mix of locations, with high streets serving visibility and everyday footfall, while malls provide scale and a more comprehensive consumer experience.

For retailers, the decision is therefore not necessarily about choosing one format over another. A brand may use flagship outlets in prominent malls, smaller neighbourhood stores on high streets or a combination of both, depending on its business model and target market.

The appropriate mix also varies by category. Fashion, beauty, electronics, grocery and food-service businesses may have different requirements for store size, customer visits, accessibility and surrounding amenities.

Outlook: New Supply Will Be Crucial for Retail Expansion

India’s organised retail property market is navigating a mismatch between retailers’ interest in physical expansion and the limited availability of premium mall space. The 38% decline in mall leasing during the September quarter contrasts with the 33% increase in high-street leasing, while total retail leasing across the eight cities slipped nearly 5% year-on-year.

The expected addition of 12.7 million square feet of retail space through 2028 could ease some of the pressure, provided projects are delivered and attract tenants. Until then, high-street properties are likely to remain an important option for brands seeking suitable locations.

Key indicators to monitor include new mall completions, Grade A vacancy levels, high-street rental trends and leasing activity across individual cities. These measures will help show whether the market’s supply constraints are easing and how retailers are balancing visibility, customer access and occupancy costs in their expansion plans.