MUMBAI: As the metro rail network is expanding at rapid pace in Indian cities, the land value within 500 m of upcoming metro corridors in India is expected to rise by 10-15%, as per JLL report.
India has seen a phenomenal growth in metro rail construction in last 2 decades covering a total of 760.62 km of metro rail network with another 578.34 km under construction. Cities including Kochi, Chennai, Bengaluru, Nagpur and Nashik have seen significant expansion of new metro lines.
Further, two new technologies including Metro Lite and Metro Neo are being planned to provide affordable connectivity options in tier II cities and peripheral parts of tier I cities.
As per the report, residential property in South Delhi area appreciated by 15-20% in last 5 to 6 years while the micro-market of corridor-I and corridor-III in Hyderabad saw rates rise by 15-20% from 2018 to first quarter of 2021. Many pockets in the city of Chennai witnessed an increase in land prices closer to metro stations ranging from 15-35%. In Bangalore, The micro-market of CBD along with few SBD locations like Indiranagar, CMH Road, Jayanagar, Malleswaram, Yeshwanthpur, Rajajinagar, etc. witnessed a price growth of 8-10% as soon as the East-West & North-South corridors opened for public use.
According to A Shankar, head, strategic consulting and valuation advisory, India, JLL, “The real estate market has seen a steady growth along the metro corridors, owing to increase in developments alongside the routes. Furthermore, on an average, the land value within 500 m of metro corridors has increased by 15-20%, especially in residential and commercial areas. Additionally, it has been observed that appreciation in land value has been on a rise after the metro operation and increase by 2-5% annually over other locations, compared to the construction and planning phase.”
The deployment of the metro corridor directly impacts real estate sector as it increases land value, land use change and densification alongside the metro corridor. Also, mass transit systems such as metros and monorails significantly contribute towards solving traffic problems. Thus, projects which are planned around the vicinity witness an increased urban real estate value, since consumers are willing to pay more for convenience, the report said.
The Central Government plan is to expand the metro rail network to around 1000 km by present network when India celebrates its 75th Independence Day in 2022. India plans to have at least 25 Indian cities with a metro network with a total network of 1700 km by 2025.