High streets outpace malls in retail leasing

Absorption touches 4.3 mn sq.ft in H2 2025: Anarock

Property Pulse

India’s retail real estate sector is undergoing a structural shift, with high-street leasing gaining momentum even as overall absorption remained steady at about 4.3 million sq.ft across the top seven cities in H2 2025, according to Anarock Retail’s RELEAP 2026 report.

“India’s retail real estate story is entering its most exciting chapter yet,” said Anuj Kejriwal, ceo – retail & ceo – EMEA, Anarock Group. He noted that the sector is moving beyond traditional transactional formats towards experience-driven, engagement-led retail.

Total absorption of around 4.3 million sq.ft during the period reflects sustained retailer confidence in physical formats, despite evolving consumer behaviour and a dynamic macroeconomic environment.

Leasing demand was led by apparel, followed by entertainment, hypermarkets/supermarkets and food & beverages. These segments together highlight a clear shift towards retail formats that combine shopping with experience, leisure and social engagement.

Store sizes between 1,000 and 5,000 sq.ft continued to dominate leasing activity, underlining retailer preference for scalable and efficient formats that balance cost, flexibility and brand visibility.

On the supply side, the development pipeline remains robust, with Delhi NCR and Hyderabad together accounting for nearly 70 per cent of upcoming retail supply. This concentration reflects developer confidence in high-growth corridors and their ability to absorb institutional-grade retail space.

The report also highlights a divergence in performance between high streets and malls. High-street micro-markets across cities have witnessed rental appreciation, supported by strong demand and limited availability of premium retail space.

With vacancy levels in Grade A malls remaining constrained, several brands—particularly in fashion, luxury and food & beverages—are increasingly turning to high streets as an alternative route for expansion.

In contrast, mall rentals have remained largely stable, with growth limited to select high-performing assets. This suggests that while premium malls continue to attract demand, the broader mall ecosystem is under pressure to differentiate through tenant mix, curation and experience design.

Demand patterns also vary across cities. NCR and Mumbai Metropolitan Region saw strong traction in apparel and entertainment-led leasing, reflecting high footfall-driven retail environments. Hyderabad and Bengaluru, on the other hand, witnessed stronger participation from anchor categories such as hypermarkets and family entertainment centres, indicating the growing importance of community-oriented retail ecosystems.

RETAIL boom 

• 4.3 mn sq.ft absorption in H2 2025. 

• Apparel, entertainment lead leasing demand. 

• Mid-sized stores dominate 1,000–5,000 sq.ft range. 

• NCR, Hyderabad account for 70% supply. 

• High streets see strong rental appreciation. 

• Limited mall supply pushes brands to streets.