kolkata: Kolkata witnessed a jump of nearly three times in terms of leasing of office space in the first quarter of 2023 compared to the same period last year, with the banking sector accounting for over half of the leasing volume while Salt Lake Sector-V remained the prime micro market followed by Rajarhat.
The city witnessed a gross leasing volume of 0.63 million sqft in Q1, 2023 which is being considered a healthy leasing momentum according to a study report by the real estate consultancy firm, Cushman & Wakefield.
The quarter saw an uptake of large spaces by a couple of prominent domestic banks, as the Banking, Financial Services and Insurance (BFSI) sector accounted for over half the leasing volumes in the quarter, it was observed. On the contrary, the IT-BPM sector which normally is the key driver of the market activity, accounted for around 17 per cent of quarterly leasing volumes and finished at second spot, the study found.
In addition to these two sectors, the flexible workspaces segment accounted for 11 per cent of leasing volumes, backed by a major pan-India operator expanding its operations in the city. The report predicted that there will be an upcoming supply of 3.6 million sqft in Q2 2023-25 while presently the space inventory comprises 26.57 million sqft.
The study revealed that Salt Lake Sector-V remained the prime micro market, recording over 75 per cent of quarterly lease volumes, followed by Rajarhat with a contribution of 23 per cent.Net absorption stood at 0.55 million sqft during the quarter, which is considered a “2x jump on a quarterly basis on the back of healthy fresh leasing.” Kolkata recorded a new supply of 0.3 million sqft in the Rajarhat micro market in Q1.
Some of the key lease transactions in Q1 2023 in Salt Lake Sector V include HDFC Bank taking a fresh lease of 260000 sqft of space at Godrej Waterside, and Smartworks taking a leased space of 70000 sqft at Godrej Genesis, among others. In Rajarhat, Infosys took a lease of 42000 sqft at Mani Casadona and Concentrix took space of 45000 sqft at DLF IT Park-I.
At a time when there was a persistent shortage of Grade-A space supply in the city amid rising demand, the report revealed that a few more projects are at an advanced stage of construction and are scheduled to be completed over the next couple of quarters across Salt Lake Sector V, Central Business District (Park Street, Camac Street, AJC Bose Road and Theatre Road), and Park Circus connector micro markets.In terms of rent, the report predicts that “Kolkata is likely to remain a largely occupier friendly market with developers/landlords looking to retain/attract tenants and maintain healthy occupancy levels across their office portfolios.”