On an Upward Real Estate Trajectory

Torbit - September 17, 2023 - - 0 |

The conducive policy ecosystem , advancements in infrastructure development and a promising business environment have all contributed to the growth of Kolkata as a premier real estate destination in the East 

Office Sector – Peripheral Business District (PBD) Leads the Growth  

The office sector has been in the forefront of real estate growth in Kolkata. Traditionally, real estate activity in Kolkata has been concentrated in the CBD areas of Park Street, Acharya Jagadish Chandra  Bose Road, New Market etc. However, due to depleting land availability in these areas, the new office developments have spilled over to peripheral locations such as Salt Lake, New Town and Rajarhat due to availability of large land parcels and emergence of  IT Parks and SEZs. This big growth of IT/ITeS industry has turned Kolkata into a preferred IT/BPO centre.

Presently, the city has an office space stock exceeding 34 million sq. ft. Moreover, approximately 2.4 million sq. ft. of investment-grade space, including projects like Ideal Unique Center (about 756,000 sq. ft.), The Summit (approx. 350,000 sq. ft.), and Imagine Tech Park (approx. 350,000 sq. ft.) in PBD, are set to conclude construction by the end of 2024. Furthermore, the Peripheral Business District (PBD) was at the forefront of the expansion, contributing 70% of the office stock share, trailed by the Central Business District (CBD) with a 24% share and the Secondary Business District (SBD) with a 6% share. Total estimated leasing by the end of CY 2023 is likely to be around 1 – 1.2 mn. sq. ft., while new supply is estimated to be 0.9 – 1.1 mn. sq. ft. by end of CY 2023.

During January-June 2023, corporate occupancy reached 0.6 million sq. ft., predominantly favouring compact to mid-sized configurations. During January -June 2023 period, the Central Business District (CBD) observed an office rental value of INR 95 / sq. ft. / month, while the Secondary Business District (SBD) saw INR 75 /sq. ft. / month, and the Peripheral Business District (PBD) recorded INR 45 / sq. ft. / month in Kolkata.

Residential Sector – East Kolkata Emerges as a  Hotspot 

In early 90s, the city’s organised residential market  was largely concentrated  in northern and central Kolkata. While the northern region consisted of mid-to-high end residential complexes, the central region was largely characterized by premium and high end standalone developments. In the mid 1990s and 2000s, the southern and western region started emerging as prominent residential  destinations due to the limited availability of developable land , coupled with high capital values in  the northern and central locations of the city. From 2000 onwards, new investment-grade residential properties were largely seen in the eastern region of the city including Salt Lake, Rajarhat and EM Bypass. These locations predominantly consisted of mid and high end projects, plotted developments and townships. 

During Jan-June 2023, East Kolkata accounted for 31% of the residential supply, followed by North at 19% and South at 16%. Additionally, within the housing sector, affordable housing took the lead with a significant 45% share, followed closely by mid-range housing at 39%. High-end housing comprised 10% of the market, while premium and luxury housing segments contributed 6% collectively during the same period.

Retail Sector – South Kolkata Takes Center Stage 

The real growth story of retail started in Kolkata in 90s when the sector spread towards central locations such  as Park Street and Camac Street. The advent of the mall culture in 2000s saw the launch of city’s first mall- Forum Mall. Since then several such organised retail developments have come up across the city -the prominent among them being South City, City Centre, Mani Square and Axis Mall.

Currently, Kolkata boasts over 8 million sq. ft. of organized retail area. The city’s expanding boundaries, and favourable demographic trends indicate substantial prospects for retail sector expansion. Till H1 2023, organized retail supply distribution in Kolkata favoured South Kolkata with a 31% share, trailed by East Kolkata at 24%, West Kolkata at 17%, North Kolkata at 15%, and Central Kolkata at 14%.

Regarding rental values of organized retail spaces, South Kolkata dominated the past six months with a substantial INR 375 / sq. ft / month, trailed by Central and East Kolkata at INR 350/sq. ft/month each, while North Kolkata recorded INR 175 / sq. ft. /month. It is estimated that rentals for both High Streets and Malls are expected to grow by 5-10% by year-end.

Logistics Sector – Infrastructure Push to  Supply & Leasing 

Amid global challenges and an e-commerce leasing slowdown, Kolkata’s industrial and logistics (I&L) space demonstrated resilience in the first half of the year (January-June 2023). Record supply additions occurred due to pending project completions. The state’s infrastructure enhancement, including roads and ports, is set to bolster the logistics sector. Kolkata recorded a significant 8-12% share in leasing activity in Apr-Jun 2023.

Presently, the city has a stock of nearly 10 million sq. ft. of Grade A logistics developments situated along NH-2, NH-6, Taratala, and other micro markets. Notably, NH-6 accounted for most of the supply at 57%, followed by NH-2 at 37%, Taratala at 4%, and other micro markets with a 2% supply share. Taratala recorded a significant rental value of INR 23 / sq. ft. / month in the past six months, followed closely by NH-2 with INR 21.5 / sq. ft. / month and NH-6 with INR 20.5 / sq. ft. / month.

 According to Ram Chandnani, Managing Director, Advisory & Transactions Services, India, CBRE, the real estate dynamics in the state, especially in Kolkata, is at a stage wherein the addition of quality supply is boosting absorption.   Furthermore, the Industrial and logistics sector has showcased promising growth and is expected to grow further at 9-10% this year. 


The strategic distribution of industrial and IT Parks is expected to create new demand centres and result in the development of newer asset classes. The state’s focus on infrastructure development in the form of roads, highways and ports is bound to boost  the logistics sector which will register a growth of 9-10% in the coming years. With the right push from the centre and the state government , Kolkata will put West Bengal on the global investment map.

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