Delhi-NCR's real estate market is witnessing renewed confidence among mall developers, fueled by a significant surge in retail leasing during the third quarter of 2025. This bullish sentiment is underpinned by robust consumer demand, the increasing presence of both domestic and international brands, and a strategic shift towards creating experience-driven retail destinations.
The retail leasing figures for Delhi-NCR in Q3 2025 highlight a substantial recovery. Approximately 0.5 million sq ft of retail space was leased, marking a 70% increase compared to the previous quarter and an impressive 88% jump year-on-year. Within this, mall leasing accounted for 179,000 sq. ft., with roughly 29,000 sq. ft. representing fresh space take-up and the remainder from renewals and churn. Gurugram led the leasing activity with a 68% share, followed by Noida (20%) and Delhi (12%).
This leasing surge reflects a broader trend of rising consumer demand, fueled by increasing incomes, urbanization, and the entry of global retail brands into the Indian market. Retailers are actively expanding their presence across both prime and emerging markets, driven by rising footfalls, robust spending patterns, and a preference for experience-led destinations.
Notably, main street rentals in prime locations have seen significant growth. Galleria Market in Gurugram recorded a 25% year-on-year increase, while Connaught Place in Delhi saw a 14% rise. Sector 29 in Gurugram, a major Food and Beverage (F&B) hub, experienced rental growth of 12-15%. This indicates the increasing value retailers place on high-visibility locations with strong foot traffic.
The Food and Beverage segment is a major driver, leading space take-up with a 40% share in Q3 2025. Wellness and Entertainment segments followed, each with a 12% share. The F&B segment has registered 1.7x growth compared to the previous year. Mall operators are allocating more space to F&B to cater to consumers' desires for unique dining and social experiences.
Despite the strong leasing activity, Delhi-NCR has not seen any new Grade A mall supply since Q1 2023. This prolonged absence of new additions has pushed the headline vacancy rate down to 11.7%, a significant decrease of 214 basis points year-on-year. Superior malls continue to record very tight vacancy, around 3%. This supply constraint underscores the need for fresh inventory to meet the growing demand. Approximately 0.5 million sq ft of new Grade A supply is expected to become operational by the end of the year.
Mall developers are also focusing on enhancing the overall shopping experience by integrating entertainment, community engagement, and curated experiences. There's a clear move toward premiumization of the tenant mix, with high-end brands and gourmet experiences gaining ground. Malls in Delhi-NCR are becoming experience-driven destinations where fashion comes alive through immersive events, tech-enabled showcases, and curated brand collaborations. This shift towards experiential retail drives higher footfall and sets the stage for continuous fashion innovation.
Looking ahead, the outlook for Delhi-NCR's retail market remains positive. Experts anticipate sustained growth in 2025, driven by new mall developments, rising consumer spending, and continued interest from fashion, homeware, and lifestyle brands. The market is expected to benefit from both end-user footfall and investment-driven leasing.
