The Calcutta office space market sparkled in the first quarter of 2023 — with country-leading growth in rentals, backed by the doubling of transactions amidst no fresh supply.

Average office space rent in Calcutta grew 9 per cent quarter on quarter (Q-o-Q), far ahead among the top eight office markets in India, a Knight Frank report showed, breaking out of years of stagnation.

Even though the volume of transactions was the lowest among the cities covered by the report, it doubled on a year-on-year (Y-o-Y) basis. Compared with 100,000 square feet transacted in January-March, the volume grew to 200,000 square feet in the last quarter.

However, no fresh supply came to the market in the last three months, tilting the balance in the favour of demand and pushing up rent.

The Calcutta office market, where rents remained stable while other markets experienced significant growth over the past three quarters, saw the rental level spike by a substantial 9 per cent YoY during the quarter, the report, published on Monday, noted.

The Telegraph had reported on March 14 how the city’s primary office markets spread over Sector V of Salt Lake and Rajarhat are fast filling up and occupancy running decade high. Since then at least one large project has been announced by Merlin Group in Sector V, where about 0.8 million square feet will hit the market 12 months from now. Moreover, Srijan Group has unveiled a project outside the Salt Lake-Rajarhat zone. A new office space complex near Park Circus has been launched too.

“Calcutta office space market is showing good traction post pandemic. Leasing activities have picked up pace and many new companies have set up establishments for the first time,” Abhijit Das, senior director (east) of Knight Frank, said. Rent is ruling at about Rs 45 per square feet in Sector V.

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Knight Frank India observed 11.3 million square feet (msf) of office space was transacted in January-March. Bangalore remained the top market with a total leasing of 3.5 msf, followed by NCR-Delhi which recorded 2.6 msf and Mumbai at 2.2 msf of gross leasing in the first three months of the calendar year 2023. The three largest markets accounted for 73 per cent of the area transacted and saw positive growth in YoY terms. One of the emerging aspects is managed flex office space operators.

“Flex spaces continue to gain ground and stands at a historic high demand share of 29 per cent in Q1 2023. The premise for value-add offerings and flexibility has firmly entered the mainstream and swayed occupiers in their favour,” said Shishir Baijal, chairman and MD, Knight Frank India.