Kolkata’s I&L sector to record supply at 5.2 msf in 2023: Report

November 20, 2023: The Industrial and Logistics (I&L) sector in Kolkata is expected to record a five-year high supply in 2023 as a result of the completion of pent-up projects across the city and its peripheries, according to real estate consultancy firm CBRE South Asia.

The official release by CBRE South Asia mentioned that total I&L supply in 2023 is expected to reach 5.2 million square foot (msf), Kolkata’s strategic location as the entry point to the country’s east and further to land-locked countries such as Nepal and Bhutan and the state’s industrial prowess has further boosted the city’s I&L sector.

It is estimated that the total I&L leasing in the city in 2023 will reach around 3.5 msf, sustaining 2022 levels. During Jan-Sep’23, total leasing in I&L sector in the city stood at 2.7 msf. The city has nearly 10 msf of Grade A logistics developments in NH-2, NH-6 and Taratala regions.

Further, the report by CBRE South Asia highlighted that the I&L growth in Kolkata has been primarily in the micro-markets of NH-2 and NH-6 due to strategic positioning along the National Highway, signifying the likelihood of further growth in both industrial and commercial activities, especially in Dankuni and Singur. Meanwhile, NH-6 emerges as a multifaceted micro-market, encompassing industrial zones such as Dhulagarh and evolving areas such as Uluberia, reflecting a combination of industrial and residential development. In the Taratala micro-market, locations such as Taratala Road, Hyde Road going upto Maheshtala, there is a distinctive mix of industrial and commercial activities, indicating the potential for growth and progress in these areas.

Residential market in Kolkata to see a five-year high in sales and launch unit-mark

According to the CBRE South Asia report, the residential market in Kolkata is likely to witness a five-year high in sales and launch unit-mark in 2023. It is estimated that the projected sales will cross 18,600 units in 2023, whereas new units launched would touch the 17,800 mark, indicating the city’s vibrant real estate market characterised by substantial and robust growth. The city has witnessed a threefold sales increase, from 4,400 units in 2019 to 14,600 units in 2023 (Jan-Sep). This rise highlights a strong demand for home ownership and positive market sentiment, potentially propelled by economic growth and heightened consumer confidence. Additionally, the new launch increased to 12,800 units in 2023 (Jan-Sep), signalling the sustained demand, thereby capitalising on the heightened market activity.

Peripheral locations such as Rajarhat, New-Town, Joka, Southern Bypass, EM Bypass, Lake Town and BT Road are the most attractive locations in terms of new launch and sales, the report said.

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “The current real estate landscape in the state, particularly in Kolkata, is witnessing a transformative phase where the infusion of quality supply is fuelling absorption, propelling the growth trajectory of the state’s real estate sector. Our observation of the Industrial & Logistics sector in Kolkata recording a five-year high supply in 2023 with a notable absorption underscores the sector’s resilience and dynamism. The anticipated absorption of 3.5 msf in CY 2023 indicates a positive outlook for leasing activities, suggesting a potential surge in demand for commercial spaces.

Kolkata’s residential market too has experienced a significant surge in sales and launches. This surge indicates strong demand and positive market sentiment, reflecting potential economic growth and heightened consumer confidence. Looking ahead, Kolkata is likely to witness a 5-year high forecast in sales and launches in 2023, highlighting substantial and robust growth, emphasizing Kolkata’s essential role in the thriving residential market and its position as a key growth hub in the eastern region.”

Parvez Khalid, Associate Executive Director, Advisory & Transaction Services, CBRE, said, “Over the past few years, the state government has been proactive in improving the prevailing business and real estate environment. Moreover, the growth of the construction sector and its real estate activity holds the state in good stead to unlock its employment generation potential. The raft of recent infrastructure developments, especially in and around Kolkata, is also expected to be a major contributor to that end. State government has taken several steps to augment the industrial infrastructure by developing new growth centres focusing on specific sectors basis the area’s connectivity, proximity to the market and labour availability.”