Kolkata, 12 February, 2019 – The Kolkata office market witnessed a 13.8% increase in gross absorption in 2018. In Q4 2018, overall absorption was 215,500 sq ft, with the full year 2018 reaching 910,000 sq ft. In 2018, Sector V and the Peripheral Business District (PBD) areas remained the most active micromarkets in terms of leasing volume contributing 54% and 34% to total absorption, respectively.

“Sector V and Rajarhat continue to be the preferred locations for expansion and relocation among IT and non-IT companies. This trend is likely to continue in the short-to-medium term due to the availability of ample Grade A supply as well as good infrastructure”, says Shubho Routh, Associate Director, Office Services (Kolkata) at Colliers International India.

Flexible workspace operators contributed 10% of the total leasing volume, while technology occupiers accounted for 29%. In terms of developments, IT-ITeS and IT-Special Economic Zones (SEZs) offices attracted 57% of the overall transaction volume and the remaining leasing was in the non-IT office spaces.

In Q4 2018, the Sector V micromarket witnessed the highest Grade A supply of the year, adding 800,000 sq ft to stock. Due to increased leasing momentum in 2018, we witnessed developers quickly completing their projects, pushing total supply to 1.3 million sq ft at the end of the year.

We project new supply of about 2.4 million sq ft over the next three years, increasing total stock by 8.9%. About 50% of the planned developments are in the Sector V micromarket, followed by the SBD micromarket on 43%, while the CBD is planned to account for 7.4%.

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