Kolkata is emerging one of the major real estate market in the country with growth across segments like Industrial and logistics and office space amongst others. The city has emerged among top three cities for I&L leasing activity in April-June of this year accounting for 8-12% industrial leasing in the country. “The city's strategic location, transportation infrastructure, economic trends, and demand for warehousing contribute to this leasing trend. The entry of international stakeholders has propelled globalisation in the sector, encompassing local real estate developers,” mentioned the report by CBRE.
Amid global challenges and an e-commerce leasing slowdown, Kolkata's industrial and logistics (I&L) space demonstrated resilience in the first half of the year (Jan-June 2023). Record supply additions occurred due to pending project completions.
The state's infrastructure enhancement, including roads and ports, is set to bolster the logistics sector. Kolkata recorded a significant 8-12% share in leasing activity in Apr-Jun 2023. Presently, the city has a stock of nearly 10 million sq. ft. of Grade A logistics developments situated along NH-2, NH-6, Taratala, and other micro markets. Notably, NH-6 accounted for most of the supply at 57%, followed by NH-2 at 37%, Taratala at 4%, and other micro markets with a 2% supply share. Owing to its advantageous positioning and exceptional accessibility, Kolkata has also maintained its status as a pivotal business and financial hub in the Eastern region of India, establishing itself as the epicentre of commercial real estate operations in West Bengal. Presently, the city boasts an office space stock exceeding 34 million sq. ft. Moreover, approximately 2.4 million sq. ft. of investment-grade space, including projects like Ideal Unique Center (approx. 756,000 sq. ft.), The Summit (approx. 350,000 sq. ft.), and Imagine Tech Park (approx. 350,000 sq. ft.) in PBD, are set to conclude construction by the end of 2024.
Additionally, the Peripheral Business District (PBD) was at the forefront of the expansion, contributing 70% of the office stock share, trailed by the Central Business District (CBD) with a 24% share and the Secondary Business District (SBD) with a 6% share. Total estimated leasing by the end of CY 2023 is likely to be around 1 – 1.2 mn. sq. ft., while new supply is estimated to be 0.9 – 1.1 mn. sq. ft. by end of CY 2023. The growing demand for commercial space is also boosting residential and retail sector . In residential East Kolkata commands a 31% share in the residential segment, cementing its status as a residential hotspot.
During Jan-June 2023, East Kolkata accounted for 31% of the residential supply, followed by North at 19% and South at 16%. Additionally, within the housing sector, affordable housing took the lead with a significant 45% share, followed closely by mid-range housing at 39%. High-end housing comprised 10% of the market, while premium and luxury housing segments contributed 6% collectively during the same period.
On the retail front Kolkata has over 8 million sq. ft. of organized retail area. The city's expanding boundaries, and favourable demographic trends indicate substantial prospects for retail sector expansion. Till H1 2023, organized retail supply distribution in Kolkata favoured South Kolkata with a 31% share, trailed by East Kolkata at 24%, West Kolkata at 17%, North Kolkata at 15%, and Central Kolkata at 14%.
However, while Kolkata retains its position as the primary real estate market in the state, the impetus on infrastructure development, highlighted by projects like the Andal airport and the Silicon project, combined with favourable policies, has driven real estate growth towards tier-II cities like Durgapur, Siliguri, and Darjeeling. These cities have consistently garnered investor attention, marking a promising expansion beyond the capital.
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