Leasing activity moderates in Kolkata in Q3 2025

• During the quarter, Kolkata saw gross leasing of 0.31 million sq ft of office space. Overall office space demand demonstrated a 41% y-o-y increase, while experiencing a 43% decline on a q-o-q basis. Quarterly net absorption of 0.2 million sq ft was noted in this period.
• The Salt Lake and Rajarhat submarkets predominantly drove office demand. The Salt Lake submarket constituted 46% of the total gross leasing, while Rajarhat contributed 41%. IT/ITeS firms accounted for 37% of leasing activity, followed by co-working providers at 28%.

Rajarhat dominates supply additions in Q3 2025

• The CBD submarket witnessed the introduction of two new offices with 0.14 million sq ft of supply, while the Rajarhat submarket added 0.18 million sq ft of new supply. Consequently, the overall office stock increased to 29.9 million sq ft during the quarter.
• The quarter saw a 70-bps increase in vacancy rate to 15.9%, driven by the completion of three new office developments, while demonstrating a 100-bps y-o-y decrease. Salt Lake and Rajarhat submarkets experienced significant annual vacancy declines.

Quality office developments drive rent growth across various submarkets

• There was a healthy demand for office space and a declining trend in vacancy that drove rents to INR 68.9 per sq ft. This represents a 12.3% y-o-y and 0.9% q-o-q growth.
• The rent growth was led by the Salt Lake submarket at 16.4% annually, reaching INR 47 per sq ft, while Rajarhat posted a 12.6% increase to INR 44 per sq ft. Strong occupier demand in both sub-markets drove rent escalations.

Outlook: Upcoming supply to support office space demand

• Multiple new office developments across the SBD, Salt Lake and Rajarhat submarkets are projected to be completed by end-2026. This new supply will infuse approximately 2 million sq ft of new spaces.
• The anticipated introduction of new supply may stimulate office space demand. Demand from co-working operators, IT/ITeS firms and manufacturing/industrial companies is expected to drive market growth, thereby supporting continued rent appreciation going forward.