The record absorption came even as developers added nearly 4.3 million sq ft of new retail supply during the year, marking a 268% jump over 2024 levels. Hyderabad accounted for more than half of the new completions, followed by Mumbai and Delhi-NCR, the report said.
Retail space take-up accelerated sharply in the second half of the year, with around 5.6 million sq ft leased between July and December 2025. Hyderabad led absorption with a 34% share, followed by Delhi-NCR at 20% and Chennai at 16%.
“Retailers are increasingly experimenting with experiential flagship stores, kiosks and Gen Z-focused formats to enhance customer engagement and dwell time,” said Anshuman Magazine, chairman and CEO, India, South-East Asia, Middle East & Africa at CBRE, adding that the strong leasing volumes reflected a shift towards quality-led, experience-driven growth.
Fashion and apparel brands dominated leasing activity, accounting for about 48% of total absorption in 2025. Store launches spanned streetwear, athleisure, ethnic and fusion wear, luxury labels and digitally native brands. The sector is also increasingly leveraging AI-led tools such as virtual try-ons, predictive inventory management and personalised styling to improve conversion and reduce returns, the report noted.
Food and beverage operators contributed nearly 12% of total leasing, driven by demand for larger, experience-oriented outlets in malls and high streets, while jewellery brands accounted for about 8%, with lab-grown diamond players emerging as a key growth segment.
D2C brands remained a major demand driver, making up around 27% of retail leasing during the year, as online-first players accelerated offline expansion to build brand visibility and improve unit economics.“Domestic retailers continue to dominate leasing activity, but international brands remain active, supported by stable consumption trends, lower inflation and recent income tax and GST rationalisation,” said Ram Chandnani, managing director, leasing services at CBRE India.
The report also highlighted the evolution of entertainment zones within malls into technology-led hubs offering VR, edutainment and gamified loyalty systems, enabling landlords to monetise large-format spaces and command premium rentals for adjoining food and beverage outlets.
