Kolkata: Real estate consultancy firm Knight Frank India termed Kolkata's commercial real estate transactions from Jan to July 2025 a watershed moment, with leasing volume reaching 11 lakh sq ft, a 60% year-on-year surge over the first half of 2024.
This was the highest half-yearly transaction volume and average deal size recorded in the past decade. "What makes this achievement particularly remarkable is the concentrated nature of this success. A single transaction in the third-party IT outsourcing sector, spanning 3 lakh sq ft, accounted for nearly a third of total transaction volumes. This, coupled with two major flexible workspace deals totalling 1 lakh sq ft, underscores a fundamental shift in how businesses are approaching office space in Kolkata," said Knight Frank India senior director (Occupier Strategy and Solutions, Kolkata) Joydeep Paul.
Vacancy rates also plummeted from 38.5% to 33.5%, the lowest level since the second half of 2019. Salt Lake City (PBD-1) commanded 50% of office transactions, closely followed by Rajarhat New Town (PBD-2) at 43%. "The trend underscored a structural transformation that reflects occupiers' preference for modern infrastructure and cost efficiencies over traditional central locations," said Paul.
However, there are supply constraints that will only be partially mitigated by the addition of 2 lakh sq ft next year and another 5 lakh sq ft in early 2026.
Average office rents climbed 10% year-on-year to Rs 44/sq ft/month, with the strongest growth driven in the same peripheral districts driving transaction volumes, Rajarhat-New Town and Salt Lake, which witnessed rental appreciation of 9% and 13%, respectively.
The limited availability of quality office spaces in these preferred locations, combined with the arrival of precisely the tenant profiles that landlords covet, has created an increasingly competitive environment. Prime properties in these districts are becoming both more expensive and more sought-after — a clear indicator that Kolkata's peripheral business districts have transcended their original positioning to become genuinely desirable destinations.
In contrast to the office sector's exuberance, Kolkata's residential market experienced what might best be described as a strategic pause. Sales volumes declined by 11% year-on-year to 8,090 units, while new launches contracted sharply by 29% to 7,682 units.
However, viewing these figures in isolation would miss the more nuanced story unfolding beneath the surface. Geographically, the residential market mirrors some of the office sector's preferences. The south region maintains its leadership with a 37% market share of the overall sales volume, but Rajarhat has emerged as a standout performer, increasing its share from 21% to 25% whilst achieving a modest year-on-year growth of 3%.
The inventory situation presents the most encouraging aspect of the residential narrative. Unsold inventory declined by 12% year-on-year to 20,338 units — the second-lowest level since 2018. This consequently improved the quarters-to-sell (QTS) metric from 6.2 to 4.9, indicating a healthier market balance.