Metro Impact on Realty Sector along Corridors – Part-I

The rapid pace at which India’s major cities are getting urbanised, it has become imperative that proper emphasis is placed on improving the connectivity along major cities. At the rate at which the influx of people is taking place across all major cities, the impetus is on the governments of these cities to handle the rising demands for better transport networks.

Connectivity to get a major boost:

Considering the population explosion that is taking place in all major cities across the country, roads alone won’t be able to handle the transport woes of the public. Hence alternative modes of transport are the need of the hour. The metro and the monorail services are important forms of alternative rapid transport systems that is catching up in all big cities in a major way. Besides, many big cities also have their local train services to cater to commuters in all nooks and corners of the city. Connectivity being one of the most important determinants for development of an area, directly impacts the demand for residential property, thereby pushing realty prices up. Hence there is immense potential for realty along the corridors through which these modern modes of transport traverses.

Cities under the Metro purview:

With the Delhi metro being such a roaring success, many other major cities have taken the cue and are in various stages of developing their own metro or monorail networks. It will promote people to stay in far-flung areas away from their work place, since commuting will be a breeze. Some of the cities where the metro or monorail networks having already started or partially completed operations  are Mumbai, Bangalore, Hyderabad and Kolkata. Other cities where construction is being planned are Chennai, Jaipur, Pune, Ahmedabad, Kochi, Thiruvananthapuram and Kozhikode.

Investors to benefit through price appreciation:

From a realty perspective, it will make sense for investors to keep track of the progress of these individual projects and make their investment decisions in a timely manner, based on the developments happening. Sub-urban areas stand to benefit the most from the metro rail service due to their connectivity to the city’s business centers. Following the announcement of a rapid transport project, property prices generally increase in three phases. The first phase is during the announcement of the project, the second is when construction starts and the third is when the project is nearing completion. A case in point is with regards to Mumbai’s Ghatkopar-Versova metro link, which is expected to become operational this year. Prices along the corridors that traverses this link have increased as much as 400% in the last eight years, since the project was initially announced.

Delhi Metro, a success story to be replicated:

The Phase-III of the Delhi metro rail project which is under progress is likely to replicate the success story of the first two phases in terms of realty development. Some of the areas in Delhi which have seen considerable appreciation since the first two phases of the Delhi metro became operational are Dwarka, Mayur Vihar, Defence Colony, Panchshila Park, Rohini and Vasant Vihar. Phase-III which is expected to be operational by March, 2016, is also likely to have a positive impact on the realty sector along its corridors. Some of the areas along the corridors of this phase that have seen considerable appreciation in realty values are Vasant Kunj, Lajpat Nagar, Sultanpuri, Jahangirpuri, Janakpuri, Kalkaji, Saket etc. Prices for apartments and villas in these areas range from 40 lakhs upwards. There are other areas like Bahadurgarh, with good connectivity, where two-three BHK apartments are available for Rs.25-40 lakh.

Mumbai Metro positively impacts realty:

Mumbai metro rail has already three phases of the project which are already operational. Moreover, it can also boast of an excellent connectivity through its local train service which connects the length and breadth of the city. The monorail project, which is yet to take off, once operational, will provide a further fillip to the connectivity that the city can boast of. Many areas along the metro corridors have seen considerable appreciation after the metro has become operational. Some of these areas are Andheri, Borivalli, Chembur, Goregaon, Juhu, Malad, Matunga, Vikhroli etc. Appreciation is in the range between 5-12% annually, in these areas.

Kolkata Metro, E-W Metro sees appreciation along corridors:

The Kolkata metro project, for which the first stretch of 3.4 km between Esplanade and  Bhowanipur was completed way back in 1984, saw an extension upto New Garia as recent as 2010. Besides, the East-West metro corridor project for which construction is in progress would connect Howrah and Sealdah Railway Stations, with an underground section passing under the Hooghly river, the first of its kind in the country. There would also be an extension upto Salt Lake Sector V, which will be an elevated line. Many areas in the vicinity of the metro like Garia, Salt Lake, Netaji Nagar, Alipore, Rajarhat, Baruipur etc have seen tremendous appreciation in realty values in recent times.

Bangalore Metro sees realty appreciation along Phase-II corridors:

The Phase-I (Purple Line) of the Bangalore metro rail project between MG Road and Byapanahalli, covering six stations, became operational in October, 2011. Construction is currently going on for Phase-II (Green Line) of the project between Nagasandra and Puttenahalli, covering 25 stations. Besides, Phase-I is also being extended upto Mysore Road, to cover an extra eleven stations. Some of the areas along the metro corridor which have seen considerable appreciation in realty prices in recent times are Indira Nagar, Banashankari, JP Nagar, Kalyan Nagar, Magadi Road, Mysore Road, Rajaji Nagar, Ulsoor etc.  Appreciation in these areas is in the range between 5-10% annually.

Chennai Metro yet to see Realty pick-up along proposed metro corridors:

The Detailed Project Report (DPR) for the Chennai metro rail project has already
been submitted by the Delhi Metro Rail Corporation (DMRC). According to this report Phase-I of the project would be implemented across two corridors, covering a total distance of 45 km. Corridor-I will stretch from Washermenpet to Chennai airport, and Corridor-II, from Chennai Central to St.Thomas Mount. Some of the areas along these two corridors which have seen considerable appreciation in realty values in recent times are Anna Nagar, Anna Salai, Shenoy Nagar, Ashok Nagar, Vadapalani etc. Since the project is still in its initial stages, rate of appreciation in these areas is quite low. It is expected that as the project progresses, there will be further appreciation in these as well as many other areas along the metro corridors, Besides, Chennai has also its own local train service, providing connectivity across the city, especially in sub-urban areas.

Continued as:  Metro Impact on Realty Sector along Corridors – Part II