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Kolkata's office leasing volume reached 11 lakh sq ft from January to July 2025, marking a 60% year-on-year increase and the highest half-yearly transaction volume in a decade. This surge was driven by large IT outsourcing and flexible workspace deals. Office vacancy rates dropped to 33.5%. However, the residential market saw an 11% sales decline and 29% drop in new launches. Despite this, unsold residential inventory decreased by 12%, showing a healthier market balance, indicating a strong commercial segment contrasting with a paused residential sector.
Kolkata's commercial real estate market recorded a significant increase in office leasing volume during the first half of the current year. This trend, seen across Kolkata, West Bengal, was driven by major transactions in the office sector, with figures showing a rise in rented commercial spaces. Advertisement
According to Knight Frank India, Kolkata's office leasing volume reached 11 lakh square feet from January to July 2025. This marked a 60% year-on-year increase compared to the first half of 2024. This period recorded the highest half-yearly transaction volume and average deal size in the past decade.
A single transaction in the third-party IT outsourcing sector contributed significantly, accounting for 3 lakh square feet, nearly one-third of the total volume. Additionally, two large flexible workspace deals totaling 1 lakh square feet also played a role. This indicates a shift in how businesses are approaching office space in Kolkata.
Vacancy rates in the office market dropped from 38.5% to 33.5%, reaching their lowest level since the second half of 2019. Salt Lake City (PBD-1) led office transactions with a 50% share, followed by Rajarhat New Town (PBD-2) at 43%. This trend highlights companies' preference for modern infrastructure and cost efficiencies in peripheral locations over traditional central areas. Average office rents increased by 10% year-on-year to INR 44 per square foot per month.
Rajarhat-New Town saw rental appreciation of 9%, and Salt Lake recorded 13%. The article also notes supply constraints, with only 2 lakh square feet of new office space expected next year and another 5 lakh square feet in early 2026. The limited availability of quality office spaces in these preferred areas, combined with the arrival of desirable tenants, has created a competitive environment.
In contrast, Kolkata's residential market experienced a pause. Sales volumes declined by 11% year-on-year to 8,090 units, and new launches contracted by 29% to 7,682 units. Geographically, the residential market also showed a preference for the south region, accounting for a 37% market share.
Rajarhat emerged as a strong performer, increasing its share from 21% to 25% with a modest 3% year-on-year growth. Despite slower sales, unsold residential inventory decreased by 12% year-on-year to 20,338 units, which is the second-lowest level since 2018. This reduction improved the quarters-to-sell (QTS) metric from 6.2 to 4.9, indicating a healthier market balance.
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