Kolkata office space transactions in H1 2019 grows 188 pc

Amid concerns of low economic growth in West Bengal, office space transactions in Kolkata recorded healthy year-on-year growth of 188 per cent in the first six months ending June 2019.

Leading property consultant Knight Frank India said availability of Grade A office stock in Salt Lake Sector V and Rajarhat New Town drives this upward momentum.

In H1 2019, IT/ITES sector records 161 per cent YoY growth in leasing.

The sector had a share of 61 per cent of the overall leasing activity. Banking, financial services and insurance sector garnered 35 per cent of the total space transacted in the city during the period, while manufacturing and other services sectors accounted for the remaining 2 per cent each.

However, the report noted that Kolkata has an oversupply of available office spaces and developers were forced to defer construction timelines due to high vacancy scenario.

The actual transaction during the H1 2019 period was 0.63 million square feet. The low base of H1 2018 was result of the massive YoY growth.

In H1 2019, the vacancy rate in the city recorded at 32 per cent, marginally higher than the H1 2018 figure of 31 per cent.

However, the situation was exactly the opposition in case of residential home sales during the period under review.

The number of residential property launches in Kolkata witnessed a massive drop of 90 per cent in H1 2019 to 627 from 6,393 units in H1 2018, the report recorded.

In H1 2019, housing unit sales also took a dip of 30 per cent and reached its lowest over the past decade to 4,588 from 6,591 in H1 2018.

The decline was attributed to the stalling of projects due to liquidity crisis, GST changes, high cost of borrowing and others, Kolkata Knight Frank director Swapan Dutta said.