Kolkata's Commercial Real Estate Sector Surges 60% in H1 2025

Kolkata, Jul 3 (PTI) Kolkata’s commercial real estate sector has seen a remarkable 60% year-on-year surge in leasing volumes, totaling 1.1 million sq ft in the first half of 2025, as reported by Knight Frank India. This significant growth has taken even the most optimistic forecasters by surprise.

In a webinar held on Thursday, real estate consultant Knight Frank released its comprehensive data for the Indian real estate market covering January to June 2025. Joydeep Paul, Senior Director (Occupier Strategy and Solutions)-Kolkata, Knight Frank India, highlighted that the office market's performance in H1 2025 is far more significant than a mere cyclical upturn. “To see leasing volumes surge 60 per cent and achieve the highest half-yearly transaction volume in a decade is a clear indication of the robust health of Kolkata's office market,” Paul stated.

The office market has been particularly driven by a major 0.3 million sq ft IT outsourcing deal and two flexible workspace agreements totaling 0.1 million sq ft. Peripheral Business Districts (PBDs) have played a crucial role in this growth, with Salt Lake City (PBD-1) accounting for 50% of transactions and Rajarhat New Town (PBD-2) contributing 43%. This distribution underscores the growing importance of these areas in the city's commercial landscape.

Vacancy rates have also shown a significant decline, dropping to 33.5%, the lowest since H2 2019. This reduction is partly attributed to the limited new supply, with only 0.2 million sq ft expected by the end of the year. Additionally, rental prices have witnessed a 10% increase during the period under review, reflecting the strong demand in the market.

The residential market in Kolkata is also undergoing a strategic recalibration, aligning with evolving buyer preferences. Knight Frank noted that the city’s real estate sector is transitioning with renewed confidence, supported by improved fundamentals and market segmentation. This positive trend is expected to continue, driven by ongoing economic growth and infrastructure developments.

Overall, Kolkata's commercial real estate sector is demonstrating a strong and sustainable growth trajectory, making it an attractive destination for both domestic and international investors.