Mumbai, one of India's bustling metropolises, continues to attract attention for its real estate dynamics. However, it is Kolkata that has recently emerged as a standout performer in the office leasing sector. According to a comprehensive report by Knight Frank India, Kolkata's office leasing market reached a decade-high in 2025, with an astounding 69% year-on-year increase in annual leasing volumes, totaling 2.3 million sq ft. This marks a significant milestone, as it is the first time the city’s office space transactions have surpassed the 2 million sq ft mark.
The report, titled *India Real Estate: Office and Residential Market, July-December 2025*, highlights that the latter half of the year witnessed an impressive 78% surge in office transactions, reaching 1.2 million sq ft. This robust performance is further reflected in the rental landscape, where average office rents climbed by 16%, now standing at ₹47.5 per sq ft per month. This rate of growth represents the highest among India's eight major office markets, signaling a strong demand for commercial spaces in the city.
On the residential front, Kolkata's market maintained its stability even as the city recorded a 7% increase in sales to 8,806 units in the second half of 2025. Although the total sales for the year saw a slight decline of 3%, the developer confidence remained high, leading to a 38% rise in new residential launches during the latter half, amounting to 8,098 units. Notably, Kolkata retains its position as the second most affordable residential market among key Indian cities, with an average price of ₹4,037 per sq ft, despite a 6% year-on-year increase in residential prices.
Joydeep Paul, Senior Director - Occupier Strategy and Solutions in Kolkata at Knight Frank India, described the office market's performance as a remarkable success story, emphasizing the city's ability to offer affordability for homebuyers. He noted that Kolkata is positioned as a sustainable and value-driven market for the long term. Additionally, the report indicated a 5% year-on-year reduction in unsold residential inventory, which now stands at its lowest level of 19,630 units. This trend underscores a healthy market equilibrium, further encouraging both buyers and investors.
In summary, Kolkata's real estate landscape in 2025 reflects a strong office leasing sector buoyed by rising rental rates, alongside a steady residential market. As the city continues to evolve, its appealing affordability and growing infrastructure make it a prime destination for both commercial and residential investments.
