Leasing Activity In Hyd’s Retail Space Witnesses 106% Growth

Hyderabad: The retail real estate market in the city has continued its growth momentum during January – March period (Q1 2025), recording 8.07 lakh sft of leasing activity, driven by fashion, wellness, food & beverage brands, according to a report.

Cushman & Wakefield, a real estate services firm, on Tuesday released its Q1-2025 Retail Market Beat Report. The report mentioned that leasing activity in the city’s retail space witnessed 106 per cent y-o-y growth and 2 per cent q-o-q increase to 8 lakh sft retail space leased in Q1 2025, from 3.91 lakh sft in Q1 2024 and 7.92 lakh sft in Q4 2024. High street locations in Hitec City, Madhapur and Nacharam dominated the market, contributing over 90 per cent of total leasing activity. While suburban retail corridors such as Kothapet, Nallagandla, and Kompally witnessed strong leasing traction, Jubilee Hills emerged as a key contributor with a 24 per cent share in overall transactions. The leading demand drivers were fashion with 27 per cent share, wellness 19 per cent, and food & beverage 16 per cent. Domestic brands accounted for 98 per cent of the total leasing volume, indicating strong expansion trends among homegrown retailers, the report pointed out.

Saurabh Shatdal, Managing Director, Head-Retail India, Cushman & Wakefield, said: “Retail sector is evolving at a dynamic pace, and the strong leasing activity in Q1 2025 reflects growing market confidence. Several Hyderabad-based retail brands are expanding aggressively, leveraging their strong local presence. This is particularly evident in the F&B and ethnic fashion segments.”

He further informed that the ongoing infrastructure upgrades, including multi-level flyovers, underpasses, and road widening at key junctions like IIIT and Khajaguda, are likely to enhance connectivity in Gachibowli, Nanakramguda, and Tolichowki. These improvements could further support retail growth in surrounding areas by improving accessibility and footfall, Shatdal added. Despite rising demand, mall vacancy rates remained at 1.8 per cent in superior malls, while average malls continued to experience higher vacancies. According to the report, the absence of new Grade-A mall supply in Q1 supported stable occupancy levels. High street rentals on an average increased by up to 2 per cent y-o-y, driven primarily by Jubilee Hills. Meanwhile, rentals at malls remained steady.

Looking ahead, Hyderabad is set to witness a record retail supply of 28 lakh sft by 2027, with 17 lakh sft slated for 2025. Areas such as Kompally and Shamshabad will see fresh retail developments, catering to rising demand in these underserved locations, according to the report.