The delay in implementation of the West Bengal Housing Industry Regulation Act (WBHIRA), 2017, the state’s version of the Real Estate (Regulation & Development) Act, 2016, had triggered a slump in home sales in Kolkata in 2018 even as all other major cities in India reaped the benefit of the consumer-friendly law and clocked impressive sales.
The scenario though was very different in commercial segment that saw a resurgence after nearly a decade. The year also saw the emergence of warehousing sector with transaction of close to 3 million square feet and demand for even more space that was stymied by lack of availability. In the residential sector, sales was down 10% even as Bengaluru reported a growth of 27%, NCR 8%, Hyderabad 9%, and Mumbai and Chennai 3% each. Launch of new projects in city declined 10%, bucking the all-India trend where nearly every city witnessed record number of launches: Mumbai at 220%, Pune 157%, Hyderabad 54%, Bengaluru 22%, NCR 35% and Chennai 12%.
Within Kolkata, it was Rajarhat that was hit the most with sales down by 43%, followed by east (Kankurgachhi, Beliaghata. Salt Lake, Narkeldanga, Keshtopur, EM Bypass) where it was down by 19% and central where sales fell 16%. The sales slump saw inventory shoot up to 38,536 units. While in the beginning of 2018, the average time to sell the inventory was projected to be less than 3 years, it has now shot up to beyond 3 years. Only NCR with a huge inventory of 1,42,000 apartments may take longer to sell at 3.5 years. Average price of apartments also dipped 1% and now hovers around Rs 3,259/sq ft. Price of properties in north Kolkata witnessed the sharpest drop at 9% along Jessore Road and 7% along BT Road. Even posh Park Street saw property price dip by 6%. In rest of the city, price either remained stable or saw a marginal growth. Ironically, though Rajarhat registered the largest sales slump and highest inventory growth, it also saw a 9% price hike driven by select projects. “We believe the Kolkata market is still struggling with GST and regulatory issues, particularly in the implementation of WBHIRA. With developers getting projects registered with the regulator, launches and sales slumped. That should turn around this year,” Arvind Nandan, executive director (research) at international realty consultant Knight Frank. If gloom in the residential sector was in contrast to the bright sunshine in the commercial sector with office space offtake hitting the elusive 1 million sq ft mark after close to a decade. While Bandhan Bank has booked 1,74,000 sq ft, PwC has reserved an additional 1,00,000 sq ft. Stenton Wilson has taken 40,000 sq ft. “Office space market has picked up. Transactions of 1.2-1.5 million sq ft happened between 2005 and 2008. Thereafter, the transactions fell to below 1 million sq ft. Now that it has picked up again, we are hoping the uptake will continue,” said Knight Frank branch manager Swapan Dutta. International consultant Jones Lang LaSalle (JLL) is betting on transaction of 1.5 million sq ft this year. “With Infosys starting its campus, we expect more IT poeple coming in. The government initiative to set up the Silicon Valley in New Town will also resonate positively,” said JLL managing director (Kolkata) Surekha Bihani. However, the sunshine segment in real estate is warehousing with demand overtaking supply. While Flipkart has taken 2,30,000 sq ft, Amazon has reserved 2,52,000 sq ft. In addition, Future Supply Chain Solutions, a Biyani group company, has taken 70,000 sq ft and is keen on a further 1,25,000 sq ft. “The off-take in warehousing and logistics is huge and should be between 3 million sq ft and 5 million sq ft this year,” said Dutta