In the past five years, land value within 500 meters of a metro corridor has increased by 15-20% in various cities of India. 20-25% growth have also been witnessed in retail and commercial prices owing to reduced commuting costs and job generation opportunities.
“The real estate market has seen a steady growth along the metro corridors, owing to increase in developments alongside the routes. 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,” said A Shankar, head-strategic consulting and valuation advisory, India, JLL.
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, according to the company.
In the last 5-6 years, residential property in South Delhi area appreciated by 15-20%. The land value of the metro on the Nirman Vihar stretch which became operational in 2010, was observed substantial increase from Rs 150,000 per sq yard to current prices in the range of Rs 200,000-250,000 per sq yard.
Many pockets of Chennai witnessed an increase in land prices closer to metro stations ranging from 15%-35% after the metro phase-I got operational in 2019. The commercial and retail rental prices along 100 feet road saw about 50-70% increase and few properties even touched an 100% increase.
The residential prices almost a decade ago before start of Chennai metro were Rs 3,600 per sq ft and now have surged to Rs 7,000 per sq ft during year of operation of the metro. Though the increase in property prices are owing to various reasons but the metro connectivity which has eased accessibility is surely one of the primary reasons.
The government usually addresses the specific needs of housing development by granting extra FSI (Floor Space Index) along the Transit Oriented Development (TOD) corridors such as metro corridors. This increased FSI will reflect in increased prices for land, according to the company.