Kolkata, a vibrant city in India, has recently made headlines with its office market achieving remarkable growth. In 2025, Kolkata's office leasing volumes surged by 69% year-on-year (YoY), reaching an impressive 2.3 million square feet. This marks the highest annual leasing activity seen in over a decade, with the city crossing the 2 million square feet threshold for the first time. The upward trend continued into the latter half of the year, where leasing activity further accelerated by 78% YoY.
Average rents have also witnessed a notable increase, rising by 16% to Rs 47.5 per square foot per month. This surge positions Kolkata at the forefront of rental growth among eight significant Indian markets, as reported by Knight Frank India. The primary drivers of this expansion have been flex space operators and IT services, especially concentrated in areas like Salt Lake City and Rajarhat New Town, which accounted for over 95% of the total leasing activity.
The tightening of market conditions was further emphasized by a significant reduction in vacancy rates, which dropped by 624 basis points to 29.9%. Joydeep Paul, Senior Director at Knight Frank India, highlighted that the top ten leasing transactions represented nearly 45% of the total activity, indicating a strong shift towards flexible and technology-driven workplace strategies. This reflects the evolving needs of businesses in today’s dynamic economic landscape.
In addition to the thriving office market, Kolkata has also maintained its reputation as one of the most affordable residential markets in the country. Knight Frank India's report on 'India Real Estate' for H2 2025 noted that Kolkata retains its position as the second most affordable residential market with an affordability index of 22%. While annual residential sales saw a slight dip of 3% to 16,896 units, the latter half of the year reported a 7% YoY increase in sales, suggesting a revival in market sentiment.
The health of the residential market continues to improve, with unsold inventory decreasing by 5% to 19,630 units, marking the lowest level in a decade. Moreover, the Quarters-to-Sell (QTS) metric improved to 4.6 quarters, signaling a robust demand driven primarily by end-users within the Rs 5-20 million price range. As Kolkata navigates this dual growth in office leasing and residential affordability, it stands out as a city poised for continued economic vibrancy and opportunity.
