Kolkata Office Market Shows Exceptional Growth in Q3 2025
Kolkata's commercial real estate field experienced significant changes in the third quarter of 2025. The city's office market showed strong growth that exceeded expectations. This development shows changing corporate tactics and higher demand from technology-driven businesses seeking good office solutions in rising markets.
High Transaction Volume Sparks Market Hope
Office leasing activity surged to 0.67 million square feet in Q3 2025, equating to a 65% yearly rise and a 29% increase from Q2. What’s more, gross leasing volumes saw a 190% leap year-on-year, placing Kolkata among the fastest-growing office markets in India.
Net absorption figures show market robustness, with 0.43 million square feet recorded. This surge, up 7% sequentially and 14% yearly, shows long-lasting corporate trust and the city's growing appeal for office expansion.
Rents Outperforming National Standards
Kolkata's rental trends offer a strong case for both tenants and investors. Average Grade-A rents rose 14% yearly, making Kolkata the top-performing market among major Indian cities in rental growth. This growth outpaces Mumbai's 11% and Delhi-NCR’s 9%.
Rental benchmarks across submarkets are as follows:
- Central Business District (CBD): Rs 110.1 per sq ft per month
- Sector V: Rs 53 per sq ft per month
- Rajarhat: Rs 47 per sq ft per month
Stability in Grade-A average rents at Rs 52.5 per sq ft per month indicates a balanced market responding well to supply-demand equilibrium.
Supply Demand Creating Premium Scarcity
Kolkata's rental surge stems from a major supply-demand gap affecting the market. No new supply entered in Q3 2025, while additions remain limited at 0.17 million square feet annually. This supply control boosts landlords' power and supports rent increases.
This leads to a clear result: city-wide vacancy rates dropped 160 basis points to 14.8%, reducing available space for companies needing quick expansion. These tight conditions change leasing dynamics, forcing corporations to choose limited choices and accept higher rents.
Domination by the IT-BPM Sector in Leasing
IT-BPM firms stay the market's main movers, commanding 53% of the leasing activity up to now. This focus shows Kolkata's key role in India’s tech scene and its advantages in hiring talent and reducing costs.
Flexible workspace developers played a part, taking 13% of leasing volumes, and engineering and manufacturing firms also grabbed 12%. This mix across various occupier groups shows market appeal beyond typical IT demand.
Notable deals include:
- IBM’s lease renewal of 200,000 square feet in Rajarhat
- Fresh commitments from Tata Consumer Products
- Office space expansion by SREI
These big moves confirm Kolkata’s appeal for global firms and varied Indian enterprises.
Strong Pipeline Sets For Sustainable Market Uptrend
Even though the 2025 supply remains limited, the future looks bright. 1.36 million square feet of office space will be built or planned for 2026, adding supply and meeting corporate demand. This upcoming addition will support the market's long-term growth while easing future rent rises.
Kolkata’s Grade-A office stock sits at 27.59 million square feet, with 4.03 million square feet under development. Extra supply, paired with ongoing demand from tech sectors, favours a balanced market development.
Strategic Market Directions for Participants
With strong transaction growth, a rise, and low immediate supply, real estate investors and developers find good opportunities. Kolkata's 14% rental surge attracts businesses compared to major metros, while the thriving IT scene ensures steady demand.
For tenants, a smart approach to creating a lease agreement can help avoid higher rents, especially with low vacancy and limited Grade-A space.
Kolkata’s office market in Q3 2025 exemplifies excellent value growth from limited supply and strong sectoral demand in commercial real estate. The city’s top rental growth signals broader economic changes and confirms Kolkata’s importance in India's real estate sector.