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KOLKATA REAL ESTATE : More Supply - Less Demand

Dhruva Jyoti Chowdhury, Kolkata, India

While the property prices are moving at a great pace across the major cities in
the country, Kolkata has also felt the heat. Property prices are up by 10 – 35
per cent at select areas due to demand-supply mismatch. What is more, even up
market apartments are being lapped up in quick succession due to vibrant
economy and the increase in disposable income.

Among the areas undergoing swift real estate development in and around the city,
specific mention must be made about Mayfair Road, Lansdowne, Loudon Street,
Gurusaday Road, Ballygunge circular road and the Theatre Road. Residential property
prices moved not less than by 10 per cent across all markets, if the realtors are to be

The appreciation is steep in areas like Alipore by 36 per cent last year, 57 per cent in EM
bypass, 33 per cent on Jessore Road, 20 per cent in Gariahat and Rashbehari. Even entry-
level investors are handsomely rewarded if one wants to enter at the green field stage and
opts to quit at the implementation stage. However, most of the demand is end user driven
and investors are yet to plunge into the city.

Incidentally, Kolkata is a shining example where private-public model has been working
effectively. Recently ICRA, premier rating agency, has accorded the highest published
rating RT2 plus to Hiland Park Phase II which translates into strong project ever granted
to a real estate developer in the country.

The commercial property market is predominantly driven by IT and ITES sector and the
organized retail formats. In 2005, aggregate office segment absorption of approximately
5.5 lakh sq. ft. has been reported with a majority of the demand in suburban locations of
sector V, Salt Lake and New Town Rajarhat. However, with a few IT oriented
development projects maturing, rentals in Sector V have remained stable at Rs. 34-35 per
sq. ft. per month.

According to Cushman & Wakefield, property consultants, the real estate sector is
expected to witness increased activity in the short to medium term. While demand is
expected to improve, quality stock will gradually enter the market (in Sector V and
Rajarhat) over the next 6-18 months. Several national level developers have acquired
land to tap the expected IT/ ITES demand. Technology firms are anticipated to provide
employment to approximately 14,000 people translating into a real estate opportunity of
around 1.10 million sq. ft.

Availability of skilled professionals at relatively lower costs compared to other metros,

low attrition rates, stable power supply and proactive state government are instrumental
in driving the national developers to Kolkata.

North Kolkata Central Kolkata

Jessore road 1,200 - 1,600 Park street 3,500 - 4,000
VIP road 1,200 - 1,600 Loudon street 3,500 - 5,000
Madhyamgram 950 - 1150 Theatre road 3,500 - 4,500
Shyambazar 1,300 - 1,500
B.T. road 1,400 - 1,800

Eastern Kolkata
South Kolkata Kankurgachi 1,800 - 2,200
Lansdowne 2,600 - 3,200 Salt lake 1,800 - 2,200
Bhowanipore 2,300 - 3,000 Beliaghata 1,300 - 1,600
Theatre road 3,500 - 4,500 EM bypass (Central) 2,000 - 3,000
Rajarhat 1,300 - 1,500

Dobson road 1,400 - 1,700

Salt lake G.T. road (south) 850 - 1,000

Beliaghata 1,300 - 1,600

EM bypass (Central) 2,000 - 3,000
Rajarhat 1,300 - 1,500

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