Salt Lake dominates office space transactions while Rajarhat-New Town records a spurt

The total office space transaction volume in the first half of 2023 (January-June) is being considered the second highest that Kolkata has witnessed in the past seven half-yearly periods while Salt Lake continuing to dominate the most amount of office space transactions with Rajarhat-New Town also witnessing a significant growth.

In the first half (H1) of 2023, Kolkata witnessed office space transaction volume of 0.6 million sqft which is considered the second-highest volume recorded in the past two years, according to a recently published report by the real estate consultancy firm, Knight Frank. The report observed that “during the pandemic years, the transaction volumes had reduced due to mobility restrictions. However, with the pandemic fear a thing of the past, office space enquiries have been resurfacing.”

The report highlighted that Kolkata’s most sought-after peripheral business district (PBD) of Salt Lake City (PBD-1) dominated the occupier interest during H1 2023 as two-thirds of all office spaces transacted during this period were in this business district.

Rajarhat-New Town (PBD-2) comprised 26% of the city’s office space leasing volume. It was observed that Rajarhat’s share has increased from 3% in H1 2022 to 26% in H1 2023. The reason is attributed to the benefits of the availability of premium office space stock and good connectivity and infrastructure.

In terms of the end-use split of office spaces transacted in H1 2023, 79 per cent of the space was leased for India-facing businesses whilst 21 per cent was for flexible spaces comprising co-working and managed office spaces.

The share of flex spaces has increased from 14 per cent to 21 per cent in the past year.

This is largely due to expansion by some co-working operators in Salt Lake City during this half-yearly period. The demand for managed office spaces has been growing in Kolkata.

Compared to the year-ago period, Kolkata’s office space vacancy declined by 219 basis points to 40.42 per cent in H1 2023. Despite this significant decrease, it continues to be the second highest amongst the vacancies recorded in India’s top eight markets, after Ahmedabad, the report remarked.

In terms of rental value in H1 2023, office spaces in Salt Lake City range from Rs 30/sqft/month – Rs 55/sqft/month. In Rajarhat New Town, it is Rs 24/sqft/month – Rs 45/sqft/month. Recently, Babul Supriyo, Minister of Information and Technology & Electronics department, shared an artist’s impression of the Larsen & Toubro Infotech - Mindtree IT & Es Park project which is to come up in the Bengal Silicon Valley, New Town.

The project has started and will have a total built-up area of 3,60,072 sqm accommodating about 20k professionals.