As several cities add metro rail to their public transport facilities or extend their existing networks, a JLL report said that land value within 500 metre of upcoming metro corridors is expected to increase by 10-15 per cent, according to a JLL report.
Noting that India was introduced to the metro rail as an alternative mode of transport three decades, the report said: “Since then, the advantages of the metro rail system have increased many-folds. Primarily it has been the enhanced connectivity to the suburbs of the city, thus enabling distribution of the city population to a larger extent of land resulting to congestion reduction in the city.”
Covering a total of 760.62 km across India with another 578.34 km under construction, the past two decades has seen a tremendous growth of the metro rail. Cities including Kochi, Chennai, Bengaluru, Nagpur and Nashik have seen significant expansion of new metro lines, which was highlighted by the Finance Minister in the Union Budget hearing in January 2021.
Further, two new technologies including MetroLite and MetroNeoare are being planned to provide affordable connectivity options in tier II cities and peripheral parts of tier I cities.
“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 metre of metro corridors has increased by 15-20 per cent, especially in residential and commercial areas,” said A. Shankar, Head – Strategic Consulting and Valuation Advisory, India, JLL.
He further said that it has been observed that appreciation in land value has been on a rise after the metro operation and increase by 2-5 per cent annually over other locations, compared to the construction and planning phase.
The deployment of metro corridor directly impacts the real estate sector as it increases the land value, land use change and densification alongside the metro corridor. Mass transit systems such as metros and monorails significantly contribute towards solving traffic problems, the report said.
Thus, projects which are planned around the vicinity witness an increased urban real estate value, since consumers are willing to pay more for convenience, it said.
Residential property in the South Delhi area of the national capital appreciated by 15-20 per cent in last 5-6 years. The land value of the metro on the Nirman Vihar stretch which became operational in 2010, was observed substantial increase from Rs 1.50 lakh per square yard to current prices in the range of Rs 2 lakh-2.5 lakh per square yard. Similar price appreciation has been witnessed in other cities.
Metro rail network of 702 km is already operational across the country, and another 1,600 km of metro rail network is under construction in 27 cities.