Chennai’s retail scene is booming, and the numbers don’t lie—the city’s retail market soared by 8% year-on-year in the third quarter of 2025, proving that consumer confidence is alive and well. But here’s where it gets interesting: while the overall growth is impressive, the where and how of this expansion reveal some surprising trends that could reshape the city’s shopping landscape. Main streets stole the show, accounting for a whopping 88% of leasing activity, with a 29% jump from the previous quarter. According to Cushman & Wakefield’s Q3-2025 Retail Marketbeat Report, high-profile areas like T. Nagar, Anna Nagar, ECR, and Purasawalkam drove nearly half of the total demand. And this is the part most people miss—the Off-CBD sub-market led the charge with a 29% share, closely followed by Suburban South at 25%. Why does this matter? It suggests that retailers are betting big on established neighborhoods rather than solely focusing on the Central Business District. Controversial take: Could this shift signal a broader trend of decentralization in Chennai’s retail strategy?
Sector-wise, the story gets even more intriguing. The food and beverages (F&B) sector dominated with a 24% share, followed by accessories and lifestyle at 22%. Domestic brands continued to rule the roost, grabbing 74% of leasing activity. But here’s the twist—international brands doubled their presence compared to 2024, now holding a 26% share. Is this the beginning of a global retail invasion, or just a blip on the radar? Notable deals included Decathlon’s 20,000 sq.ft lease at Pondy Bazaar and StyleUp’s 12,000 sq.ft space on East Coast Road, highlighting the growing appetite for premium locations.
Malls, though smaller in volume, saw 0.02 million sq.ft leased, with the north-west sub-market leading at 58%. F&B, fashion, and CDIT brands drove mall demand, while overall vacancy rates dipped slightly to 13.36%. Superior-grade malls maintained their stronghold, with vacancies hovering between 1%-2%. But here’s the kicker: Grade A malls saw modest rental increases, thanks to limited space and steady demand. Main streets like Anna Nagar 2nd Avenue, Pondy Bazaar, and Velachery recorded quarterly rental growth of 3%-10%, a trend expected to continue as domestic brands keep the pressure on. Will this lead to a rental bubble, or is it a sustainable uptick?
As Chennai’s retail market evolves, one thing is clear—the city is becoming a battleground for both local and global brands. But the real question is: Can this growth be sustained, or are we witnessing a temporary spike fueled by post-pandemic recovery? Let us know your thoughts in the comments—do you think Chennai’s retail boom is here to stay, or is it just a fleeting moment in the city’s economic story?
