New Delhi, July 1 (IANS) India’s retail real estate sector maintained its growth momentum in Q2 2026, with gross leasing volume reaching 2.4 million square feet across the top eight cities, up 23.2 per cent quarter‑on‑quarter and 17.6 per cent year‑on‑year, a report said on Wednesday.

The report from Cushman & Wakefield said the strong growth momentum reflected sustained occupier demand despite continued supply constraints.

Total leasing during H1 2026 reached 4.35 million square feet, up 3.1 per cent from H1 2025, and no new Grade A mall supply was added for a second consecutive quarter.

Space uptake remained strong in projects completed in H2 2025, reflecting sustained retailer preference for organized retail formats.

Meanwhile, the limited availability of premium mall space and rising rentals, led retailers to evaluate opportunities beyond Grade A assets, including select Grade B developments. Overall, malls accounted for 51.3 per cent of total leasing (1.23 million square feet), registering a 33.4 per cent QoQ and 21.9 per cent YoY growth.

Main Streets continued to attract healthy occupier interest, accounting for a 48.7 per cent share (1.17 MSF) during the quarter. While their share moderated marginally, leasing volumes grew by 14.0 per cent QoQ and 13.3 per cent YoY, supported by continued demand for high-visibility, consumption-driven locations.

Domestic retailers maintained their dominant position, contributing 82.4 per cent of total leasing, with most of their activity concentrated in main streets (roughly 54 per cent). International retailers, meanwhile, accounted for 17.6 per cent, with nearly 76 per cent of their leasing in malls, reflecting a clear preference for institutionally managed, high-quality retail environments offering curated consumer experiences.

“Even in an environment where quality retail supply remains constrained, occupiers have shown a clear willingness to compete for well-located assets, whether in premium malls or established high streets. This has resulted in tighter vacancies, firmer rentals and broader leasing momentum across major cities,” said Gautam Saraf, Executive Managing Director, Mumbai & New Business, Cushman & Wakefield.

The gradual addition of new supply combined with sustained consumption growth is expected to improve market availability of quality retail space and create fresh expansion opportunities for retailers, he added.

Delhi NCR, Mumbai and Hyderabad together contributed 64 per cent of Q2 leasing, with Delhi NCR at 0.67 million square feet, Mumbai 0.50 million square feet and Hyderabad 0.37 million square feet. Fashion led category leasing with a 28.2 per cent share, followed by food and beverage at 17.2 per cent.

—IANS

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