Rent for office space leaped by 10 per cent in Calcutta during the first half of 2023, the most among top 8 office markets in India, led by strong demand from Sector V of Salt Lake. Two thirds of the office space transactions recorded by consultancy Knight Frank in the city took place in Salt Lake, leading to squeeze in available top grade office space and spike in rates.

Rajarhat - New Town, the second most important peripheral business districts of Calcutta, also witnessed 4 per cent rental growth while the rest of the city’s prominent office micro market, such as central business district (Dalhousie, Esplanade, Park Street, Camac Street), Park Circus Connector and Rashbehari Connector witnessed no raise.

Rajarhat’s share in the January-June period stood at 26 per cent, swelled from a mere 3 per cent recorded in the first half of 2022. The location benefited from the proximity to airport, Sector V and availability of premium office space stock and infrastructure.

Ravindra Chamaria, chairman and managing director of Infinity Group, concurred with the findings and stuck to his earlier prediction, shared with this newspaper, that there could be a shortage of good office space in Sector V.

“The market is buoyant. There are many enquiries coming up. I apprehend that there will be a shortage in six months,” Chamaria said.

Transaction volume stood at 0.6 million square foot in H1 even as no fresh supply (completed office space) came to the market. The rent at Sector V now stands at Rs 45-50 per square foot a month, which continues to be one of the most affordable in the country.

Nationwide, transaction volumes stood at 26.1 million square foot, 3 per cent higher than the same period of 2022. Bangalore continues to top, followed by Delhi-NCR, Chennai and Hyderabad.

Housing trend

Share of affordable housing (up to Rs 50 lakh) came down sharply in Calcutta in line with the national trend as home loan rate spike coupled with inflation. Share of sales volume dropped to 49 per cent in H1 from 62 per cent in the same period of last year.

Share of the mid segment (Rs 50 lakh to Rs 1 crore) remained stable at 24 per cent, while the premium segment (Rs 1 crore and above) gained share from 13 per cent to 17 per cent. Sales of units and launches stood at 7,324 units and 6,776 units in the first half, nearly flat as compared to the same period of 2022. Nationally, sales were marginally down (1 per cent) to 156,640 units, Knight Frank’s H1 India Real Estate Report, said.