Kolkata Office Leasing Surges to Decade-High as Housing Affordability Persists
Kolkata's office market recorded its strongest performance in over a decade in 2025. Annual leasing volumes surged 69% year-on-year (YoY) to 2.3 million sq ft, crossing the 2 million mark for the first time.
Momentum persisted in the second half of 2025, with leasing rising 78% YoY. Average rents grew 16% to Rs 47.5 per sq ft per month, marking the highest rental growth among eight major Indian markets tracked by Knight Frank India. Expansion was driven by flex space operators and IT services, with Salt Lake City and Rajarhat New Town comprising over 95% of total leasing activity. The continued absence of new office supply tightened market conditions, reducing vacancy by 624 basis points to 29.9%.
"The city witnessed its highest annual transaction volume in a decade. Notably, the top 10 transactions accounted for nearly 45% of total leasing activity, signalling a structural shift toward flexible and technology-driven workplace strategies," said Joydeep Paul, senior director (occupier strategy and solutions, Kolkata) at Knight Frank India.
Knight Frank India's ‘India Real Estate' report (H2 2025) positions Kolkata as successfully balancing growth with affordability. It continues to rank as the country's second most affordable residential market with an affordability index of 22%.
In the residential segment, performance reflected consolidation supported by improved sentiment. While full-year sales moderated marginally by 3% to 16,896 units, H2 2025 saw a 7% YoY rise in sales and a 38% rebound in new launches. Annual launches stood at 15,780 units, down 6% YoY. Market health indicators improved meaningfully. Unsold inventory declined 5% to 19,630 units—the lowest in a decade—while Quarters-to-Sell (QTS) improved to 4.6 quarters.
Residential prices rose 6% YoY to Rs 4,037 per sq ft. Demand remained end-user driven, concentrating on the Rs 5-20 million bracket. While the sub-Rs 5 million segment saw steady traction, its share of launches dropped to 35% in 2025 as supply shifted toward mid and premium offerings. The Rs 20 million-plus segment remained a resilient niche.
"Kolkata has managed to stay steady and remain affordable for homebuyers. This balance between growth and affordability is rare in today's real estate cycle and positions Kolkata as a highly sustainable, value-driven market for the long term," Paul added.
