Kolkata maintained steady leasing at 0.26 million sq ft, with BFSI and flex operators active. No new supply helped lower vacancy to 17.8%. Rents remained stable across micro-markets. With over 1.1 million sq ft under construction, moderate supply-led growth is expected in H2 2025 as demand holds steady.
Kolkata’s office market maintained a steady growth trajectory in Q1 2025, registering 0.26 million sq ft in gross leasing volume (GLV)—a 21% year-on-year rise. Net absorption stood at 0.38 million square feet, aided by a continued uptick in new leasing and stable demand across key submarkets. While vacancy levels declined slightly, rental values remained essentially unchanged.
Leasing Activity Shows Positive Momentum
Leasing activity in Kolkata was dominated by fresh leasing, which accounted for 100% of GLV during the quarter. Occupiers continued to focus on high-quality stock in well-connected micro-markets.
- Top sectors driving demand:
- BFSI: 19% share
- IT-BPM: 16% share
- Flex space operators: 13% share
- Key submarkets by demand:
- Sector V, Salt Lake: 43% of total leasing
- Rajarhat: 27% of leasing share
- CBD and Park Circus Connector: contributed modestly
Overall, occupiers remained cost-conscious but sought scalable, high-specification spaces in suburban locations with ample infrastructure and upcoming supply.
No New Supply in Q1, Vacancy Sees Dip
Kolkata saw no new completions in Q1 2025, helping reduce the city-wide vacancy rate to 17.8%, down from 18.5% in the previous quarter.
- Current inventory: 23.4 million sq ft
- Submarket with lowest vacancy: CBD – 12.4%
- Submarket with the highest vacancy: Rajarhat – 24.4%
With healthy absorption and no new supply additions, city-level vacancy is likely to decline further in the coming quarters. Key under-construction projects are expected to enter the market only after the second half of 2025.
Rentals Remain Stable Across Submarkets
Despite improved demand and tightening vacancy, Kolkata’s stock-weighted average rent held steady at ₹51.5/sq ft/month.
- CBD rentals: ₹110.1/sq ft/month
- Rajarhat: ₹34.0/sq ft/month
- Salt Lake Sector V: ₹48.5/sq ft/month
Landlords continue to remain flexible on commercial terms, especially in peripheral micro-markets, to attract long-term tenants. The rental outlook remains range-bound in the short term due to a cautious demand outlook and lack of pressure on available stock.
Noteworthy Deals
Several prominent lease transactions highlighted occupier confidence in well-established buildings:
- Standard Chartered Bank – 28,000 sq ft at Rajarhat
- HDFC Bank – 22,857 sq ft at Sector V, Salt Lake
- Indian Bank – 22,000 sq ft at Sector V, Salt Lake
- Yes Bank – 18,000 sq ft at Rajarhat
These deals reflect growing traction from BFSI firms consolidating and expanding footprints in tech and commercial corridors.
Outlook
Kolkata’s office market is expected to sustain its current pace of leasing, supported by steady demand from the BFSI sector, flex operators, and select IT occupiers. While vacancy may decline further due to a lack of immediate supply, rentals are likely to remain flat in the near term. No new completions are expected until the second half of 2025, giving landlords near-term leverage. Vacancies may gradually decline, while rents are likely to remain stable. Over 1.1 million sq ft of office space is under construction, positioning the market for modest supply-led growth from late 2025 onward.
