Kolkata Real Estate
Kolkata has all the ingredients for high growth in its real estate market, according to real estate services firms. 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.
It is believed that 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.
The real estate dynamics of Kolkata are changing at a very fast pace. The realty market is on a high due to a combination of factors such as - the arrival of reputed MNCs and big corporates looking for the right addresses and a sudden increase in the number of developers of upmarket property.
Residential
The market for residential property has witnessed a distinct movement as Kolkata is breaking with the past. Projects of reputed builders such as DLF, Unitech are burgeoning in the peripheral suburban areas of Kolkata due to the emergence of Kolkata as an upcoming IT destination of India. Upscale localities and highrises have started dotting the city's skyline.
The residential market in Kolkata has a large number of Public-Private-Partnership (PPP) projects. Under such partnership, the Government agencies like the West Bengal Housing Board have taken up joint ventures with private corporates. New Town, adjacent to Salt Lake is one such example, which is on the verge of opening up 40,000 units in the first phase, being offered by the West Bengal Housing Infrastructure Development Corporation Limited (HIDCO).
Commercial
The commercial market in Kolkata has witnessed large number of inquiries coming in from multinationals. Most of the property demands are from the domestic and international retail chains to set an upward trend in the commercial market. For MNCs and Corporates, apart from Salt Lake or Lansdowne Road parts of C R Avenue, Rawdon Street, and Ballygunge Circular Road are also set to get a more upmarket status.
In the coming days, demand for office space is expected to be generated by players such as call centre operators, insurance companies, information processing outfits and restaurants. A Sizeable demand has already been generated by entertainment-cum-shopping complexes, and this trend is likely to continue in the near future.
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Office Space Market to Treble
The office space market in Kolkata is expected to treble from 3.7 million sq ft in 3Q 2007 to 12 million sq ft by 4Q 2008.
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.
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 reports, 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.
It is believed that Kolkata is on the threshold of modernization 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.