Research &

Forecast Report
Kolkata | Office
January 2015

Market is likely to
remain stagnant in
2015
The Kolkata office occupier market continually remains
subdued for the second consecutive year as a result of the
policy level issues, with total absorption totalling around
1.66 million sq ft in 2014. This figure is similar to the 2013
levels. The primary contributor of this demand was BFSI
with around 25% share, followed by IT/ITeS with 21%
and the construction sector with 16%. Major transactions
include the purchase of large office spaces by local
companies and leases of about 40,000 sq ft by Serco Global,
30,000 sq ft by KPMG and 29,000 sq ft by British Telecom.
Due to weakening demand and policy level stagnancy,
developers deferred their projects and only about 1.14
million sq ft of prime office space was added to the city
office space. Major completions this year include Merlin
Infinity measuring 0.43 million sq ft and Martin Burn
Business Park consisting of 0.4 million sq ft office space.
Most of the projects completed this year are located in
Sector V/New Town. Around 16 million sq ft of office
space is at various levels of construction in the city, and is
expected to be completed by 2017.

City Office Barometer

INDICATORS

1Q 2015 F

Vacancy
Absorption
Construction
Rental Value
Capital Value

Rental Values
MICRO MARKETS

RENTAL
VALUE*

% CHANGE
QoQ
YoY

CBD**

85 - 115

-5%

-11%

SBD***

65 - 75

-7%

-7%

Sector V/ New
Town

42 - 50

0%

-6%

PBD****

34 - 35

-1%

-4%

*Indicative Grade A rents in INR per sq ft per month

**Park Street, Camac Street, Chowranghee Road, AJC Bose Road
***EM Bypass, Topsia, Ruby
****Salt Lake, Rajarhat

Grade A office rents in Kolkata have continued on a

downward trend and declined by 7% YoY in the face of
relatively weak demand. Capital values showed mixed
trends across the city, with the CBD registering 3% increase
YoY on the back of domestic investor demand. Peripheral
locations like Sector V and New Town recorded a 16% YoY
decrease.
Limited supply addition and below-average absorption kept
the vacancy on the same levels.
For the first time in Kolkata, the local government reduced

4Q 2014

Research & Forecast Report | January 2015 | Colliers International

the circle rate in the range of 8% to 33% across the city to

streamline property valuation by reducing discrepancies
between registration price and actual market value of
properties.

New Supply, Absorption And Vacancy Trends

Looking at the weak demand, developers refrained from

launching new projects. Hence, no major new project was
launched in 2014. This further created an impact on the
rents as it declined by 7% YoY on the average across all the
micromarkets, except in SBD locations like EM Bypass,
Topsia and Ruby, where rents remained stable. Similarly,
capital values declined in Sector V and New Town by 10%
YoY but it rose by 8% YoY in the CBD due to robust demand
by local companies. All other micromarkets remained
stable.

Trends to watch for in 2015:

25%

20%

15%

10%

5%

2010

2011

2012

2013

New Supply (In Mln sqft)

2014

2015F

2016F

Absorption(In Mln sqft)

0%

Vacancy(In %)

Forecast

12,000

20

2,000

2016

4,000

2015

40

2014

6,000

2013

60

2012

8,000

2011

80

2010

10,000

2009

100

Capital Values INR Per sq ft

120

2008

The next year is expected to remain stagnant until the city

receives a boost at the policy level. Developers will refrain
from completing their projects until they see a strong signal
of improving demand. The market will remain tenant
favourable and rents may decline further in peripheral
locations due to robust under-construction developments
in the pipeline. However, rents for prime office spaces
located in the CBD will remain unaltered due to consistent
demand and limited supply in this location.

Rental Values INR Per sq ft Per Month

Average Rental And Capital Value Trend

Top 5 Transactions of 2014

CLIENT

BUILDING NAME

AREA (SF)

LOCATION

LEASE / SALE

Mount Hill Realty

Godrej Water Side

70,000

Sector V/ New Town

Sale

RDB Group

Godrej Water Side

70,000

Sector V/ New Town

Sale

Serco Global

BIPL

38,000

Sector V/ New Town

Lease

KPMG

Godrej Water Side

30,000

Sector V/ New Town

Lease

British Telecom

DLF-II

29,351

Sector V/ New Town

Lease

Key Under Construction Projects

BUILDING NAME

DEVELOPER

AREA (SF)

LOCATION

POSSESSION

Mani Twin

Mani Group

1,800,000

Rajarhat

2015

Technopolis 2

Forum Projects

1,200,000

Bantala

2015

Magnacon

Infinity Group

Salt Lake

2015

740,000

Source: Colliers International

Notes:
1. Office Market: The major business locations in Kolkata are CBD (Park Street, Camac Street, Chowranghee Rd, AJC Bose Rd), East Kolkata (EM Bypass, Topsia, Ruby), Salt Lake/
Sector V and New Town / Rajarhat.
2. Rents/Capital Value: Market average of indicative asking price for Grade A office space.
3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter.
4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter.
5. All the figures in the report is based on market information as on 25th December 2014.

Research & Forecast Report | January 2015 | Colliers International

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Surabhi Arora
Associate Director | Research
+91 124 456 7500
surabhi.arora@colliers.com
Sachin Sharma
Assistant Manager | Research
Amit Oberoi I National Director
Valuation & Advisory Services & Research
For Office Services:
Swapan Dutta
Sr. Associate Director | Office Services
Swapan.dutta@colliers.com
Colliers International

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