‘Salt Lake, Rajarhat-New Town drive city’s office market rental growth’
Kolkata: Kolkata’s office market remained largely stable in 2024 with the city recording a total of 1.4 million square feet (mn sqft) of office space leasing while new office completions were recorded at 0.3 mn sqft.
According to the report by real estate consultancy firm, Knight Frank India, during July-December 2024, the average transacted rents for office market in the city recorded an increment of seven per cent and was at an average value of Rs 41/sq ft/month.
During 2024, rentals in Kolkata increased by 7 per cent YoY, with the Peripheral Business Districts (PBD) I and II areas experiencing the sharpest surges of 11 per cent and 7 per cent YoY, respectively. This growth is primarily driven by high demand for quality office spaces in established micro-markets such as Salt Lake City and Rajarhat-New Town. Limited availability in these districts has exerted upward pressure on rents, particularly for properties catering to premium occupiers, the report said. Despite the withdrawal of government incentives such as the stamp duty rebate and circle rate reductions in July 2024, the market remained resilient.
The city saw the third-best year since 2010 with sales of 17,389 units and performed better than the years that had the stamp duty rebate. Residential sales in H2 2024, which was not completely incentivised, totaled to 8,259 units, marking an 8 per cent YoY increase over H2 2023. “Kolkata’s commercial real estate sector has experienced a minor dip in transactions with a 1 per cent YoY de-growth, which can be attributed to the subdued leasing activity in the latter part of the year. Despite this marginal decline, Kolkata remains a significant destination for office space demand, particularly for sectors such as IT, BFSI and healthcare. These sectors collectively bolstered leasing volumes with peripheral business districts continuing to attract most occupiers,” said the report. Vacancy rates in Kolkata showed a notable improvement, declining by 339 basis points YoY to reach 36.2 per cent in 2024. The easing of vacancy levels is attributed to steady leasing activity over the past two years and the absence of large speculative completions. The average transacted rent has increased by 6.6 per cent YoY to INR 41 /sq m/month. This growth is primarily driven by high demand for quality office spaces in established micro-markets.
Shishir Baijal, chairman and managing director, Knight Frank India, commented: “Growing interest of India facing businesses in Kolkata’s commercial market is a sign of upward trajectory in the coming years for overall growth of the sector. With average transacted rent growing at a healthy pace, multi-dimensional growth is anticipated.”
