Kolkata office and retail real estate on growth path | INRnews
Office Space Market to Treble
The office space market in Kolkata is to treble from 3.7 million sq ft in 3Q 2007 to 12 million sq ft by 4Q 2008, says JLLM.
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. Avani Signature, 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 Abhishek Kiran Gupta of JLLM, 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.
JLLM believes that Kolkata is on the threshold of modernisation 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.
By INRnews Correspondent