Currently, when all the major Indian metro cities are registering the soaring numbers of residential stocks and weak customer sentiments, Kolkata is riding high on the infrastructural developments and office space absorption. Unlike the other cities, properties in Kolkata is experiencing positive price movements. In recent times, the office space market is recording new heights in terms of office space absorption as several global firms are planning to expand their operations here. This has led to a sudden surge in demand of A-Grade office spaces. As per the latest report by Cushman & Wakefield, the city of Joy, majority of metro cities is recording low vacancy levels, Kolkata is experiencing a high office vacancy level at around 42%.
The primary reason for elevating unsold stock were deficiency of conducive business environment which has led to sluggish transactions. “This has led to a shortage of new ventures, investing into the region or existing companies who are planning for expansion. In addition to it, an oversupply of office spaces against the demand by the firms has discouraged the developers of Kolkata. Further, West Bengal’s major economy generators such as coal mines, tea garden and jute are not growing as per the expectations and going through bad phases and overall depression in the national market also added in the weakened sentiments.
The lack in office space take-up has affected the business hubs, especially in the areas such as EM Bypass, Park Road, Loudon Street, Ballygunge despite these regions are offering office spaces at affordable prices. In the last few years, Sector V and Rajharghat has turned up as a major commercial hub and recorded good supply and office space demand. Due to slow expansion of IT companies, these two areas are majorly affected and the impact can be seen in Central Business Districts (CBDs), CR Avenue, Dharamtala, Dalhousie due to the lack of modern facilities such as scarcity of parking space, power back-up, old constructions.
What can be done in Future?
Meantime, the realty specialists are optimistic about the overall scenario and expecting a comeback in near time. According to the experts, once the multinational companies will start their operations with full-fledged up setup, the conditions will improve. This would improve the market sentiments and will help in changing the perception of the property market in Kolkata. Along with that, if the pricing or the rental structure can be relooked and some lucrative offers can be introduced, it will provide huge profits.
Initiatives by the Government
The state government has introduced few measures to lure the investors by raising several campaigns such as road shows, real-estate fairs and more. These initiatives include:
- To make the whole process more convenient and quick, state government has introduced Single-window clearance cell. This has been set up to fast-track approvals of the statutory compliances.
- To pace up with the current growth requirements, the government is giving special emphasis on the industrialization for the overall betterment of the realty market of Kolkata.
- As IT sector is offering great potential, the state government has started taking initiatives such as amplified focus on the development of IT/ITES, Special Economic Zones (SEZs) and the improved infrastructure.
Sustained by all the above factors, Kolkata’s realty world derives supplementary support from its competitive property rates in comparison to other metros. With the improved infrastructural growths, the city is witnessing massive growth.