Kolkata warehousing leasing falls 30pc to 4.6 mn sq ft in 2025: Report

Kolkata, Mar 5 (PTI) Warehousing leasing in Kolkata declined 30 per cent year-on-year to 4.6 million square feet in 2025 from 6.5 million square feet in 2024, mainly due to elevated land prices and limited availability of Grade A facilities, according to a report by Knight Frank India.

Despite the moderation in leasing activity, the city’s warehousing market continues to demonstrate resilience and long-term potential, supported by improving infrastructure and evolving occupier demand, the consultancy firm said in its latest report released on Thursday.

Among sectors, third-party logistics (3PL) and e-commerce remained the key demand drivers. However, the share of the 3PL segment declined to 32 per cent in 2025 from 42 per cent a year earlier, reflecting changing occupier strategies.

The manufacturing sector emerged as a strong growth engine, registering a 7 per cent year-on-year rise in leasing activity and expanding its share of total transactions to 21 per cent in 2025 from 13 per cent in 2024.

E-commerce accounted for 22 per cent of total leasing, supported by sustained consumption trends and growing demand for last-mile delivery infrastructure. Leasing activity in the fast-moving consumer durables (FMCD) segment remained stable at 6 per cent, while the FMCG and retail sectors recorded marginal gains.

Geographically, Dankuni and its surrounding areas continued to dominate the warehousing market, accounting for 60 per cent of total leasing in 2025, slightly higher than 59 per cent in the previous year. The cluster’s strategic location along the Durgapur Expressway and Old Delhi Road, along with better connectivity and labour availability, has reinforced its position as a key logistics hub in eastern India.

The share of leasing along National Highway 16 (old NH 6) rose to 40 per cent in 2025 from 38 per cent a year ago, driven by improved Grade A supply and connectivity. In contrast, the Taratala-Maheshtala and Andul Road clusters did not witness any leasing activity during the year.

Joydeep Paul, Senior Director, Occupier Strategy & Solutions at Knight Frank India, said the decline in leasing volumes was largely supply-driven.

“While 2025 saw a temporary moderation in leasing volumes, Kolkata’s warehousing market remains fundamentally strong. The decline was largely driven by elevated land costs and limited Grade A supply rather than any demand-side weakness,” Paul said.

He added that rentals have remained steady, reflecting sustained occupier confidence, and leasing activity is expected to regain momentum as infrastructure upgrades continue and manufacturing and e-commerce players expand their presence.

According to the report, Grade A warehouse rentals along the NH 16 corridor ranged between Rs 18 and Rs 27 per square foot per month, while rents in the Dankuni and suburban clusters were slightly lower at Rs 18 to Rs 25 per square foot per month. PTI BSM NN