[ecis2016.org] With Mumbai struggling with transportation infrastructure for long, we look at how the multiple metro rail lines planned for the city, will help the commuters and the impact it will have on the real estate sector
Transportation infrastructure in cities across the globe, has a proven positive impact on real estate and also along the peripheral micro-markets of the cities. There is optimism, hence, that the development of the metro rail in Mumbai, will bring about a transformation and boost the realty sector. “Hopefully, the Mumbai Metro’s upcoming corridors, will be operational in 5-10 years. Any planned infrastructure results in massive real estate growth, in and around the corridors and a similar impact could be seen when the VAG (Versova-Andheri-Ghatkopar) Metro line became operational, transporting a large number of commuters daily between the western and eastern parts of the city. Similarly, residential and commercial properties located close to the upcoming metro hubs, will command a premium,” says Rajat Khandelwal, chief marketing officer, Omkar Realtors and Developers Pvt Ltd.
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Mumbai Metro rail and its impact on real estate growth
Dharmesh Jain, CMD of Nirmal, points out that with the metro coming up, property prices in Ghatkopar, Andheri east and west, have soared. “Andheri east, which was only a commercial area earlier, now has many residential projects too. JP Road, Andheri west, had a lot of traffic woes. However, after the metro was opened, not only have the roads become comparatively free but the demand for housing has also increased. Affluent builders have already started developing projects there,” he adds.
The metro network is a blessing for Mumbai, as commuting from any part of the city to another, will become easy, says Khandelwal. “The metro will uplift those areas, which are far from the suburban railway stations. It will also have a significant impact on the lesser-known areas covered along its routes. One can expect approximately 10-50 per cent appreciation, in the short term. The areas under the metro route that is already operational, have already witnessed an appreciation of 10-20 per cent,” Khandelwal elaborates.
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Micro-markets that are likely to benefit from the Mumbai Metro
The combined effect of mega-projects, such as the Eastern Freeway, Santacruz-Chembur Link Road (SCLR) and the monorail, have positively impacted the residential and commercial markets in Andheri, Jogeshwari and Ghatkopar.
“Developers’ interest in projects near the metro routes, has been increasing and there is an upward pressure on prices. The micro-markets that are likely to benefit are CBD (central business district), SBD (secondary business district) north and the western and eastern suburbs. Moreover, residential developments in Thane and Navi Mumbai will receive a boost, due to improved connectivity with the commercial hubs in the western suburbs and SBD north,” explains Surabhi Arora, senior associate director, research, Colliers International.
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When a metro project is announced, there is generally a spurt in the capital values of localities near its route and then, it tends to gradually slow down. Property rates again pick up, once the construction work nears completion. “The population density of residential areas near a metro will increase, after it becomes operational, as people prefer proximity to transport modes, along with the increase in demand for offices and retail spaces. Apart from the areas that are adjacent to the metro line, sometimes, the impact of the metro is also felt in nearby locations. The impact is especially profound, when metro stations are located at commercial centers.
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“The residential localities in the vicinity appreciate due to increased connectivity to the commercial hub. This was evident with the first phase of the Mumbai Metro, from Versova to Ghatkopar, which provided east-west connectivity, improved the standard of living and reduced travel time. Similarly, the upcoming Metro phases – Metro Line 2A (from Dahisar-DN Nagar), Metro Line 7 (Dahisar east-Andheri east) and Metro Line 3 (Colaba-Bandra-Seepz) – are likely to boost residential launches along the metro corridors,” states Ashutosh Limaye, head, research and REIS, JLL India. It is, hence, wise to investing in a project, where a metro rail is expected to come up in the vicinity, to get good returns, he concludes.
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