**India’s Retail Sector Shifts Focus Back to Malls Amid High Street Decline**
India’s retail landscape is witnessing a notable shift as the focus returns to malls, following a significant 26% quarter-on-quarter decline in high street leasing during the second quarter of 2025. According to a recent report by Cushman & Wakefield, malls accounted for 45% of the leasing volume in Q2, totaling 1.01 million square feet, marking a 42% increase from the previous quarter and the highest mall share recorded in the last five quarters. This trend indicates a growing consumer preference for experience-driven and structured retail formats.
Despite the decline in leasing activities on high streets, they still maintained a dominant market presence, representing 55% (1.23 million square feet) of the total leasing volume. This underscores the ongoing undersupply of quality mall spaces across various cities. The ‘Q2-2025 Retail Market Beat Report’ highlighted that no new mall supply was introduced in Q2, with Grade A mall completions for the first half of 2025 reaching 1.3 million square feet. Consequently, mall vacancy rates decreased by approximately 77 basis points to 8.16% in Q2 2025, with premium Grade A malls experiencing even tighter vacancies at just 4.28%. This trend reflects the increasing demand for high-quality retail assets, enhancing landlord leverage in prime locations.
Average main street rents remained stable on a quarter-on-quarter basis, showing a healthy 6% year-on-year increase. Suvishesh Valsan, Head of Research India at Cushman & Wakefield, noted that while high streets continue to drive retail activity, the tightening vacancy levels in Grade A malls indicate a clear preference for high-quality, experience-led retail spaces. Looking ahead, nearly 4 million square feet of new Grade A supply is anticipated in the latter half of the year, particularly in major metropolitan areas such as Mumbai, Delhi-NCR, and Hyderabad.
The report also revealed that domestic retailers maintained a strong position in leasing, accounting for 86% (1.93 million square feet) of the total volume. International retailer participation saw a significant increase, rising to 14% with 0.31 million square feet of leasing activity, up from 8.5% in the previous quarter. This growth is largely attributed to malls, which remain the preferred choice for global brands seeking structured environments, enhanced brand visibility, and curated customer experiences.
In terms of city performance, Hyderabad, Mumbai, and Delhi-NCR emerged as the leading markets, recording leasing volumes of 0.76 million square feet, 0.52 million square feet, and 0.3 million square feet, respectively, collectively accounting for over 70% of the total leasing activity in the quarter. They were followed by Pune (0.23 million square feet), Bengaluru (0.18 million square feet), Chennai (0.16 million square feet), Kolkata (0.05 million square feet), and Ahmedabad (0.04 million square feet).
As the retail sector evolves, the shift towards malls signifies a broader transformation in India’s consumption landscape, driven by changing consumer preferences and the increasing presence of international brands.
**FAQ**
**What is driving the shift from high streets to malls in India’s retail sector?**
The shift is primarily driven by a growing consumer preference for experience-driven and structured retail formats, as well as the undersupply of quality mall spaces in various cities.
