The Kolkata office sees strong demand momentum in Q1 2025

• In the quarter, a net absorption of nearly 0.28 million sq ft was recorded. Net absorption increased by 132.8% q-o-q and 263.2% y-o-y. Co-working operators have shown strong interest in the city, followed by IT service providers.
• The overall Kolkata gross leasing stood at 0.41 million sq ft in Q1 2025. The Salt Lake submarket accounted for 65.2% of the total leasing activity, followed by the Rajarhat submarket with 18.3%.

Two new office spaces become operational in Q1 2025

• Two new office developments, totalling 0.25 million sq ft, were introduced to the market. The SBD submarket had the highest supply, followed by the CBD. The aggregate Kolkata office inventory reached 29.6 million sq ft.
• Kolkata’s office vacancy rate reached a historic low of 16.2% at end-Q1 2025, representing a substantial decrease of 390 bps y-o-y. The anticipated completion of four additional office projects by year-end 2025 may potentially elevate vacancy levels.

Rents up across submarkets during the quarter

• Increasing demand coupled with low vacancy rates has propelled overall Kolkata gross rent to INR 67.2 per sq ft. This represents a substantial increase of 13.2% y-o-y and a notable 3% q-o-q growth in rent.
• During the quarter, the Salt Lake submarket exhibited the most significant rent appreciation at 3.9%, followed by Rajarhat, which experienced a q-o-q rent increase of 2.5%.

Outlook: Strong demand due to quality supply surge

• Four new office developments are anticipated for completion in the upcoming quarters of 2025, distributed across the Rajarhat and CBD submarkets. These projects are expected to introduce an additional supply of 0.5 million sq ft.
• The forthcoming supply is anticipated to positively influence office demand. Leasing activity from co-working operators, IT/ITES, manufacturing/industrial and BFSI sectors are expected to drive growth, thereby supporting rent appreciation.