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This sector has been absorbing space in Sector V and Rajarhat, while corporate office demand is more subdued in and around Park Street. This does not directly imply loss of relevance of Park Street but does establish signs of a potential change. Given the competition, old commercial buildings in the Dalhousie area and the CBD are being renovated to improve building standards.

Rental values (warm shell rentals per sq ft) are approximately Rs.65 in Park Street, Rs.45 in Dalhousie Square, and Rs.43 in Salt Lake. Park Street rentals are almost 63% above last year. In terms of capital values, real estate prices (per sq ft) are around Rs.6,150 in Park Street, Rs.4,275 in Dalhousie Square and Rs.4,525 in Salt Lake. Park Street real estate prices are up 80% from a year ago while Salt Lake prices are up over 50%.

Real estate services firm Cushman & Wakefield released this information in a recent research report.

Rajarhat, unlike Salt Lake, is being developed as a new city, with not only residential projects but SEZs, IT Parks, Hotels, Retail Malls and Commercial complexes as well. This well balanced approach towards development increases the possibility of commercial office demand shifting along with residential requirements.A gradual change is in the offing, with Park Street and its adjacent areas likely to emerge as retail high street locations; a gradual metamorphosis from its current mixed stature of retail and commercial office destination.

Furthermore, the Government is also supporting the emergence of Rajarhat and is investing in infrastructure and its accessibility. Kolkata will soon have an Outer Ring Road starting from Barasat Bypass in the north to National Highway 117 at Shirakol in the south. This 60 km Eastern Expressway will run through Rajarhat, Bantala and Baruipur; all the new and developing locations.

The banking and insurance sectors will continue to drive demand in the CBD. The lack of new stock and low vacancy rates will result in rental and capital values to appreciate in the short to medium term.

Although new supply is entering the market in Sector V, low vacancy rates in prime buildings will ensure a rise in rentals over the next 12 months, impacting the IT/ ITeS sector.

The state government is trying to acquire land and allot the same to corporates such as Infosys. This may lead to the emergence of new locations in the future.

Leasing Transactions
In key leasing transactions, Foster Wheeler leased approximately 40,000 sq.ft. super built-up area at the DLF IT Park in Rajarhat. Millennium City II, Sector V, Salt Lake saw Bharti Airtel lease approximately 11,800 sq.ft., Hyundai lease approximately 3,600 sq.ft. and Lufthansa Airlines lease approximately 2,200 sq.ft. super built-up area. CMC leased approximately 25,000 sq.ft. super built-up area in Technopolis, Sector V.

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About Cushman & Wakefield

Cushman & Wakefield is the world’s pre-eminent real estate services firm. Founded in 1917, the firm has 192 offices in 58 countries around the globe, and more than 11,000 talented professionals. The firm delivers integrated solutions by actively advising, implementing and managing on behalf of landlords, tenants, and investors through every stage of the real estate process.  These solutions include helping clients to buy, sell, finance, lease, and manage assets. Cushman & Wakefield also provides valuation advice, strategic planning and research, portfolio analysis, and site selection and space location assistance, among many other advisory services.