Kolkata Poised For High Cross-sector Growth In Reality
By Property Vertical
Kolkata’s real estate market is set for a high growth phase fuelled by the IT/ITES sector. This is according to the report, “Emerging City Winners Profiles: Kolkata,” released today by Jones Lang LaSalle, one of the world’s leading real estate services firm. An increasing corporate presence in the city is also triggering growth for Retail, Hospitality and Residential properties.
“Kolkata boasts of a highly literate and well equipped workforce, lower land acquisition costs (when compared to Mumbai and Delhi) and attractive government initiatives which make it a compelling destination for corporates and developers, alike,” said Mr Vincent Lottefier, Country Head, Jones Lang LaSalle India. He further added, “We at Jones Lang LaSalle are excited to be a part of Kolkata’s growth and pleased to offer our entire range services including transaction management services, retail advisory, strategic consulting, capital markets, property management, integrated facility management and project and development services.
The report states that increasing corporate presence is stimulating growth in per capita income and encouraging consumption in Kolkata. Overall, the city provides a positive environment for new corporate entrants, as well as existing corporates eyeing expansion.
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Abhishek Kiran Gupta, Senior Manager, Research, Jones Lang LaSalle, India adds, “Kolkata is now on the ‘global radar’ of multi-national companies - a large skilled labour pool, a pragmatic, business-friendly and stable business environment, active promotion and incentives, combined with low operating costs and the city’s strong cultural heritage are attracting the attention of both the domestic and international business community. The city has become a favoured destination for IT/ITES activities, with a rapidly growing corporate presence.
“Kolkata now has most of the ingredients in place to move its economy up the value-chain - its size, skill base and heritage point to a significantly higher international profile over the long term.”
He further added, “Kolkata’s real estate market is set for transformation, and property will play a pivotal role in the city’s continued renaissance. All real estate sectors have significant potential. The growing IT/ITES sector will underpin strong expansion of the office sector; Kolkata is a high priority destination for retailers attracted by its large population and rising disposable incomes; the residential market is expanding on the back of a growing IT/ITES workforce and hotel demand is being boosted by corporate business and tourism. The Kolkata real estate market is now on the radar of leading national and international developers, all keen to participate in Kolkata’s increasingly dynamic real estate market.”
According to the report, Kolkata, whose economy grew by 8% in 2005, is home to 175 IT and ITES firms which employ approximately 40,000 people. Rapid expansion and increased business activity is expected to strongly boost demand for speculative built space as well as built-to-suit offices and 4.5 million sq ft of additional supply is likely to be completed by 2007 in Salt Lake and New Town Rajarhat. The city is also a high priority destination for domestic and international retailers with over 2-3 million sq ft of organized retail under construction by 2008.
Stimulated by the growth of the IT/ITES sector, hotel room demand in Kolkata is expected to grow at an annual 11.7% over the next five years and supply at 15.4% per year. Similarly, Kolkata’s residential demand continues to be strong, as shown by absorption patterns of recent residential demand, which are expected to grow in tandem with economic activity and investor interest.
“Emerging City Winners” is Phase IV of the Jones Lang LaSalle’s World Winning Cities Research, a multi-year programme which draws together the essence of contemporary city competitiveness. World Winning Cities Research examines trends that impact the business and economic landscape, and how these factors are coalescing to create the rising urban stars of the next decade. The research aims to identify the winners and losers among the emerging BRIC cities in India, China, Russia and Brazil.
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