Shaped by the Metro: How connectivity boots real estate
While we see a rising number of Indian cities improving connectivity by opting for MRTS, let’s look at the pros and cons linked to the new transit system.Updated: Oct 05, 2019 18:35 IST
In India, the Metro rail or mass rapid transit (MRT) system is usually hailed in a clutch of hopeful terms: Dream project, high-speed corridor, success story of urban mobility, Make In India achievement. But often, we overlook how these transport systems come to shape how and where we live.
New Metro links are changing the realty scene in Pune, Lucknow, Jaipur, Hyderabad, Mumbai, Bengaluru and Ahmedabad. As localities get better connected, cities are expanding their peripheries and developers have been cashing in on this infrastructure development.
The Metro has helped a small city like Jaipur improve its connectivity and overall infrastructure, says Santhosh Kumar, vice chairman at Anarock Property Consultants. “The Metro started operations here in 2015, and since then it has reduced traffic woes and regularised public transportation,” he points out. “For city dwellers as well as thousands of tourists who visit the heritage city, commuting used to be chaotic and unorganised. Now the Metro link has played a role in appreciating real estate values of areas such as Civil Lines, Shyam Nagar, Ram Nagar and Mansarovar in Jaipur.”
IMPACT ON TRACK
Connectivity is the sole factor that determines the success of the sector, says Abhinav Joshi, head of research at CBRE, a realty research firm. “The entire affordable-housing concept of the government will be a failure without MRTS. It is dependent on connectivity,” he says.
This is a strategic point for developers, he says. “Builders advertise their projects based on the proposed Metro link, adding premiums because a well-connected neighbourhood will get them more traction. The working population is especially attracted. This is done based on the market value 5 years down the line.”
Rentals at IT parks connected by the Metro today have higher rates. At DLF Cyber City in Gurugram, rentals stood at Rs 60-67 per sq ft in 2012-2016. Now with the Metro connectivity and new phase launching, the rentals start from Rs 110 to Rs 130 sq ft per month, he explains. “Similarly in Bengaluru, with the Whitefield phase Metro under construction, there are 1000s of housing projects being launched, including luxury homes,” he says.
The Versova-Andheri stretch in Mumbai has seen 8%-10% appreciation in residential properties over a period of three years, says Ramesh Nair, CEO and country head – India at JLL, a real-estate advisory. “This happened mainly towards the east side, as traffic got eased on road and also access towards the commercial hub (Andheri East) became easy. The growth has been relatively good in this tight market. Andheri East is one of the locations that didn’t see slowdown in prices mainly because of Metro coming in and the infrastructure uplift.”
Similarly in Bengaluru, the average monthly rentals for a standard 2BHK house spread over 1,000 sq ft is currently Rs 18,000 in Whitefield, rising by 31% since 2014 when monthly rentals were Rs 13,700, explains Kumar.
Retailers also get a slice the perks. Following the Delhi model, Mumbai has witnessed tremendous development across the Metro routes. Malls are now being used by retailers – hypermarkets and food and beverage operators. Quite often these are now favourite meeting spots for college students and working professionals.
Meanwhile in Delhi, traditional retail high-streets such as Chandni Chowk and Karol Bagh have also seen improved footfall due to the presence of Metro connectivity, says Kumar.
If we take a closer look at prominent cities such as London, New York and Singapore, their urban models have been developed around an integrated connectivity system with MRTS, says Rahul Grover, CEO of Sai Estate Consultants. “The concept is still very new in India and with it comes integrated townships, IT parks and the way people spend time in commuting changes.”
LAST MILE HURDLES
However, we lack the point-to-point connectivity, says Grover. “Metro has to connect the prominent landmarks and commercial hubs. If your workplace is not near a Metro station, you often end up taking another mode of transport and that gets pointless.”
A trail of general issues follow during the construction phase of the Metro, say experts. There’s traffic congestion, followed by rise in pollution levels; challenges in land acquisition and hence, the execution takes many years.
One interesting point is that, unlike residential projects that can hike their prices based on proposed Metro links, the office spaces reap the benefits only after the Metro line is functional, points out Joshi. With the current economic slowdown, Metros across cities could take more time for their completion and along with it, the projects near them could get delayed, speculates Grover.