According to Knight Frank India’s latest report, Kolkata’s office market faced a modest slowdown in Q1 2025, with total leasing activity dropping to 0.16 million sq ft, down 16% from 0.20 million sq ft in Q1 2024. Despite the decline, the city recorded the highest growth in office rents among India’s top eight cities, with average transacted rents rising 9% year-on-year to Rs 42 per sq ft per month.

“Despite this drop, the city’s average transacted office rents increased by 9 per cent, reaching Rs 42/sq ft/month — highest among the top eight cities, alongside Hyderabad,” the report stated. The surge in rental rates suggests that demand for premium workspaces remains intact, even amid softer leasing volumes.

Flexible workspaces led the way in Kolkata’s commercial real estate scene, contributing nearly half—0.08 mn sq ft—of the city’s total office transactions. Global Capability Centres (GCCs) followed, accounting for 24% of the market share with 0.04 mn sq ft leased. This shift reflects changing occupier preferences, with hybrid work models and global service delivery hubs driving market dynamics.

The residential segment showed mixed signals. Sales volume declined by 2% YoY, with 3,858 units sold in Q1 2025 compared to 3,937 units the previous year. However, prices told a different story. Average residential property prices hit Rs 3,947 per sq ft — the highest since Q1 2018 — marking a 9% YoY increase.

“The growing presence of India-focused businesses in Kolkata’s commercial market indicates a promising growth trajectory for the sector in the coming years,” said Joydeep Paul, Senior Director – Occupier Strategy & Solutions at Knight Frank India. “With average transacted rents steadily increasing, the market is set for multifaceted expansion.”

The luxury housing segment posted the most dramatic rise, with units priced between Rs 20–50 million, sales skyrocketing 149% from 180 units in Q1 2024 to 448 in Q1 2025. Yet, budget-friendly homes remained the most popular, with 1,598 units priced under Rs 5 million sold—making up 41% of all residential sales.

Kolkata also launched 3,707 new residential units during the quarter, indicating steady developer confidence despite the slight sales dip. With infrastructure upgrades and rising demand for flexible office solutions and premium housing, the city is charting a growth path that blends affordability with aspiration.

As office leasing patterns evolve and housing demand diversifies, Kolkata’s real estate market continues to reposition itself as a balanced destination for investors and occupiers heading into the rest of 2025.