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Latest trends in leasing of commercial spaces in Kolkata

Posted last September 21, 2017, 3:03 am in Real Estate report article

The leasing of commercial spaces in Q2 of 2017 has been more or less similar to Q1 as observed by Colliers International. Cognizant absorbed a large Built-to-suit space of 0.36 sq.ft. in Q1 that inflated the numbers in Q1. In Q2 the transactions were smaller, averaging to 9,000sq.ft. (830 sq.m.). The total absorbed area taken on lease for commercial purpose was 0.2 million sq.ft. (18,500 sq.m.).

Most of the leasing took place in Sector V, amounting to a total of 79%. The nearby locations of Newtown and Rajarhat amounted to 18% of the new leases. The remaining 3% took place in the Central Business District (CBD). These were dominated by relocation and expansion activities of the corporate houses.

In Q2, the logistics, retail, real estate and Telecoms Company had a leasing volume of 44% of the total, becoming the largest share. The banking, financial services and insurance sector became the second largest in taking commercial real estate with 26% of the total. Engineering and manufacturing companies were the third with 17%. The technology sector accounted for 11% while healthcare and pharmaceutical sector made a total of 2%.

Awfis, one of the major office space rental and sharing services in India has entered Kolkata recently with its own office in Camac Street. It has leased 20,000 sq ft (1800 sq m) area in Globsyn Crystals in New Town.

There is ample amount of space available for commercial use in the peripheral areas like New Town and Rajarhat. So even if the demand for commercial space on lease is expected to rise in the next quarter the prices will remain stable.

Capital values are in a bind in the CBD area because many of the buildings in this area are old and lacking modern facilities. Therefore owners are looking to sell these assets. The vacancy is expected to rise by 3-5% in CBD while the overall city vacancy is to remain stable at 25%.

 

New supply of commercial space is expected to come up amounting to 1 million sq ft in Q1 2018 but no new supply is scheduled for Q3 or Q4 of 2017. Demand is expected to rise from the banking and finance, telecom and education sector. The overall market will remain stable according to the forecast.