Kolkata’s commercial office market experienced a sharp 60% rise in leasing activity in H1 2025, reaching a decade-high of 1.1 million sq ft. Driven by a major IT deal and two flex workspace transactions, vacancy rates dropped, rents rose, and peripheral business districts, such as Salt Lake and Rajarhat, led the transformation.
Kolkata’s office leasing market has entered a new phase of momentum, with the first half of 2025 recording a 60% year-on-year jump in transaction volumes, according to real estate consultancy Knight Frank India. With 1.1 million sq ft leased between January and June, this marks the city’s highest half-yearly office leasing figure in the last ten years.
A single deal by a third-party IT outsourcing firm for 300,000 sq ft contributed nearly one-third of this volume. Alongside it, two foremost flex workspace transactions totalling 100,000 sq ft signalled growing occupier confidence and changing preferences in Kolkata’s commercial real estate landscape.
“This was a watershed moment,” said Joydeep Paul, Senior Director, Occupier Strategy and Solutions, Knight Frank India. “It underscores a fundamental shift in how businesses are approaching office space in Kolkata.” Paul also noted that this activity has redefined the city’s leasing norms, with both deal size and market appetite showing signs of structural transformation.
The surge was led by Salt Lake (PBD-1), which captured 50% of total office transactions, followed closely by Rajarhat New Town (PBD-2) at 43%. These peripheral districts are gaining preference over traditional CBDs, driven by cost advantages, better infrastructure, and a more modern supply pipeline.
Vacancy rates fell sharply from 38.5% to 33.5%, reaching their lowest level since the second half of 2019. However, supply constraints remain a concern. Only 200,000 sq ft of new space is expected to be added in 2025, with an additional 500,000 sq ft likely to be added in early 2026, limiting options for growing tenants in the near term.
Rents have also moved upward. Average office rentals increased 10% year-over-year to ₹44 per square foot per month. Salt Lake and Rajarhat led this rise, with 13% and 9% appreciation, respectively. The spike is attributed to a combination of limited high-quality inventory and the entry of marquee occupiers, which has made these submarkets both more expensive and more competitive.
“Kolkata’s peripheral business districts have transcended their former tag of ‘alternative’ locations,” Paul added. “They’re now established as core destinations for Grade A commercial real estate.”
While the office sector showed remarkable growth, Kolkata’s residential market reflected a cautious tone. Home sales dropped 11% year-on-year to 8,090 units, and new launches shrank by 29% to 7,682 units. However, Rajarhat again stood out, increasing its market share from 21% to 25%, with modest growth despite broader softness.
More positively, unsold inventory declined by 12%, falling to 20,338 units—the second-lowest since 2018. The quarters-to-sell (QTS) ratio improved from 6.2 to 4.9, indicating stronger absorption and market health.
From record office deals to rising peripheral dominance, Kolkata’s evolving workspace story is being shaped by flexibility, infrastructure readiness, and shifting occupier priorities—signs of a market no longer on the sidelines, but leading from the front.
