Kolkata has all the ingredients for high growth in its real estate market, according to real estate services firm Jones Lang LaSalle Meghraj (JLLM).

One of the oldest urban agglomerations in the country, Kolkata lost its position as the erstwhile commercial capital of India to Mumbai due to the socialist manifesto adopted by the West Bengal government post-independence.

Now JLLM believes the state is witnessing a resurgence driven by government policy and support for the service industry and infrastructure development that is once again attracting industry and capital to the city.

Office Space Market to Treble
The office space market in Kolkata is to treble from 3.7 million sq ft in 3Q 2007 to 12 million sq ft by 4Q 2008, says JLLM.

The CBD, comprising of the old Dalhousie district, Chowranghee, Camac and Park Streets, and AJC Bose road, is not expected to have any significant addition to commercial stock in the near future due to unavailability of land parcels.

Avani Signature, a Grade A building with a built-up area of 107,000 sq ft is to be operational in 4Q 2007. About 75% of commercial buildings in the CBD are old and would classify as Grade B space.

However, the suburban districts such as Salt Lake City and Rajarhat are expected to witness an addition of 8 million sq ft in 2007-2008 driven by high growth of the IT sector. Vacancy levels in the CBD and suburbs are low at 0.6% and 4.5% respectively. A majority of upcoming Grade A projects were also pre-leased early.

Rental and capital values in the CBD and suburbs have seen a compounded annual growth rate of 50% and 23% respectively in the last two years. Average gross rentals in the CBD grew to Rs 120 per sq ft in 3Q07, a 19% growth over the previous quarter. Average monthly gross rentals in the suburbs grew to Rs 45 per sq ft in 3Q07, a 16% growth over the previous quarter.

Retail Space to increase five times
Currently there are seven operational malls - Forum Mall, Home Land, Avani Heights, Gariahat Mall, Orchid Mall, City Centre, Metropolis Mall, and Orchid Mall - with 1.4 million sq ft of built-up space in total. Vacancy levels are low around 1%.

According to Abhishek Kiran Gupta of JLLM, the retail real estate market in Kolkata is expected to grow exponentially with as many as 16 new malls with 6 million sq ft to be operational by 2008-09. 3.1 million sq ft is likely to come up by end 2007, including Forum II, South City Mall and Mani Square.

Rental values in malls grew 57% in central and 35% in suburbs y-o-y. Ongoing rentals were Rs 275 per sq ft per month in central, and Rs 95 per sq ft per month in suburbs.

JLLM believes that Kolkata is on the threshold of modernisation and is rapidly adapting to establish itself as a world-class city. This will continue to drive demand for space in the city and also rentals upwards.
Read more
Reply
5 Replies
Sort by :Filter by :
  • Kolkata Real Estate Seen as Fundamentally Strong

    Although Kolkata has lagged behind its fellow metropolitan cities of Delhi, Mumbai and Bangalore, the real estate markets of the city are termed as far more stable than them. The property values in Kolkata are not speculative and it is mostly the end user segment that drives the real estate markets here.

    However, this nature of Kolkata real estate has duly caught the attention of investors. People intending to invest in properties find Kolkata market as fundamentally strong, says a property dealer.

    Investors who want safe investments in real estate feel that investing in Kolkata Properties may not give enormous returns but then the risk of loss is also very low. Also, the property values in Kolkata are comparatively lower than other metropolitans. Be it the segment of commercial properties, residential real estate or retail outlets, both capital values and rentals are pretty less in comparison to the other big cities.

    Given these reasons, the demand for investment property in Kolkata is rising year on year. The real estate developers also have caught the market nerves and now coming up with projects that are focused on investors. And the NRI segment is the hottest among all.

    Recently, Rosedale Developers and Bengal Shrachi Housing Development launched ‘Rosedale Garden’, an integrated township targeted towards NRI customers and investors. The project would sell 2BHK, 3BHK and 4BHK apartments in the price range between Rs 50 lakh and Rs 1.5 crore.
    CommentQuote
  • Kolkata Real Estate

    I think that the Kolkata real estate scenario is really over hyped.

    Compared to the volume of influx of IT and other MNCs in cities like Hyderabad, Bangalore, Gurgaon how many have gone into Kolkata - very few.

    But when you look at the price tags you will find figures in these cities to be comparable to Kolkata's. Why is this happening ? Kolkata is or was never a front runner in this sort of high profile industrialization compared to these metros.

    Rajarhat is the new township which is the center of all these 'development' is still far far from being even 'livably' ready - and look at the prices (40 lakhs and on wards for a decent 3 BHK unit) - don't you think its a bit ridiculous ?
    CommentQuote
  • kolkata or Bhubaneshwar?

    kolkata was, but is no more a hot investment prospect....
    however, there are possibilities of satellite towns coming up.
    since all other metros have gone far ahead & r in a level of congestion, kolkata still has options to plan and develop the infrastructure to allure investors.
    Again, lot of kolkata based real estate comp are investing in Bhubaneshwar...:p
    CommentQuote
  • I think after the current mess with TATA nano project, there will be some apprehensions about the city in minds of investors for sure!
    CommentQuote
  • While going through some of the popular old threads, I realised that all these posts were from 2007. I then tried to recollect why 2007?

    Probably 2007-2008 period was the only time Bengal got some hope. Rajarhat was promising, Buddha was honestly trying to do something. I do not want to go into details of whether those were right or wrong, because we need time to realise that. Those decisions can not be analysed in a hot and emotional environment. I guess too many people already changed their mind about Singur ... and almost all will change if media really and honestly highlight that out of 400+ farmers only 15+ had issue.
    CommentQuote