Life with a metro
Mar 05 2014
With the government promising a good transport system, particularly metro rail, developers and buyers are looking at regions once considered the middle of nowhere
For instance, take the Chennai Metro rail network that is under construction and slated for launch in phases, about 12 to 18 months from now. It connects north Chennai’s bustling areas such as Washermanpet, Royapuram and Mint, all the way up to the airport. These are areas that have been avoided by residents of south Chennai for long.
It also connects key parts of central Chennai such as Periamet, Vepery, Shenoy Nagar, Aminjikarai and Arunbakkam to Anna Nagar in the west and to the airport through commercial and residential zones of Koyambedu, Vadapalani, Ashok Nagar and KK Nagar.
“If one considers the development of infrastructure like the metro, mono rail and elevated corridors, the metro scores over others in Chennai, especially given the progress of work and the connectivity it offers across several parts of the city. It clearly has the fastest connectivity from central Chennai to the airport and it is no wonder that it has generated an increased interest among buyers as well as property developers to launch new projects in areas connected by the metro,” says Kalpana Murthy, head, residential, with international property advisory, Cushman & Wakefield.
Murthy says micro markets like Vadapalani, Ashok Nagar, KK Nagar, Ikkatuthangal and surrounding areas are looking really hot at the moment. “The segment is also still affordable in terms of pricing. Earlier Mount Road used to be the hub, but the metro project on this stretch has helped this particular corridor to replace Mount Road as the new buzz,” she says.
While already launched projects have seen a 15 to 20 per cent appreciation in prices over the past one year, projects launched about three years ago have seen an increase of at least 50 to 60 per cent in price value. “In fact, Anna Nagar used to be most preferred re-development zone over the past several years. But thanks to this metro route, Ashok Nagar and KK Nagar replaced Anna Nagar as the most sought after redevelopment zone,” Murthy says.
This phenomenon, Murthy points out, is being witnessed in Bangalore as well, where the metro has already started operations over a limited stretch and work is on in full swing to connect other areas. “People are willing to move away from the core of the city to live in suburbs that have become extensions of metro stations. But it is important that metro stations plan enough parking spaces to sustain this demand,” saysMurthy.
To Ashutosh Limaye, head, research & REIS, Jones Lang Lasalle India, there are three factors that create a buzz when a large infrastructure project is announced. When such a project is announced, it brings those areas into the real estate map and focus, thereby resulting in immediate price increase. The second jump in prices occurs when work on the ground actually starts happening. The third and the final jump takes place when the project nears completion.
“Infrastructure initiatives such as metro, monorail or expressways definitely have positive effect on real estate development as more land is made accessible, thereby widening the supply,” says Limaye.
In Delhi, the Dwaraka Expressway and the areas connected by the metro are clear examples of such increased development. In the case of Mumbai, it is not only the modern rail links, including the metro and monorail, even the second airport catapulted development in Navi Mumbai. “Neighbouring areas like Kharghar and Ulwe that are close to the second airport literally saw their fortunes change,” says Limaye.
In the case of Bangalore, Whitefield, originally an industrial zone, slowly blossomed as IT parks sneaked their way in. “After the Bangalore metro project was announced, the place has become the hub for both IT and residential projects. Similar was the case with the outer ring road projects that shook up areas like Marathahalli into happening suburbs,” Limaye says.
Anshuman Magazine, chairman & managing director, CBRE South Asia, says: “Although the pace of infrastructure development has picked up across most tier I and tier II cities, it has especially impacted leading cities like Mumbai, Delhi, Bangalore and Chennai.” Many projects have helped in solving traffic and urban decongestion problems. New emerging mass transit systems like monorails, bus rapid transport system (BRTS) and metro have been designed to improve connectivity and create social infrastructure within urban corridors.
“Home buyers are now looking at areas that are either in close proximity to or are better connected with such infrastructure projects. Developers are also looking at constructing new developments that run through or are located in close to such projects. Factors like these help sell properties at a premium, compared to other property developments in surrounding areas,” he points out.
For instance, developers in Mumbai are constructing projects along the Eastern Freeway that has reduced commuting time to south Mumbai. Projects like New Cuffe Parade by Lodha, and Crescent Bay by L&T and Omkar at Parel area are being constructed on the Freeway. Developers are focusing on building projects on the highways and freeways as it provides easy connectivity to the city,” says Pankaj Kapoor, CEO, Liases Foras.
With the development potential of Mumbai’s western suburbs almost fully exploited, the eastern suburbs are witnessing increased momentum in new development, where land parcels are still available and prices more affordable, he says.
The 16.8 km freeway that connects P D’Mello Road in south Mumbai to the Eastern Express Highway at Ghatkopar has grabbed the attention of developers. “We have seen a steady increase in inquiries for residential and commercial spaces close to the freeway’s entry and exit ramps, and developers have begun marketing projects with an emphasis on their proximity to this key arterial route,” Kapoor points out.
Bomani R Irani, CMD, Rustomjee Group, says: “Infrastructure is the key to any development and wherever there is good connectivity and roads are laid, those areas always gets developed. We, for instance, are looking at projects in Thane, as well as focusing on Navi Mumbai, near Virar, where the Mumbai–Delhi rail corridor is expected to come up,” Irani says.
“India’s first monorail route on the Chembur–Wadala segment is expected to be operational soon. This is going to boost real estate development along this corridor. We believe that both, the metro and monorail will have a great impact on the infrastructure development of the area,” says Lalitkumar Jain, CMD, Kumar Urban Development and chairman of Credai. “They will reduce traffic congestion and make the city smaller. The monorail opens up the empty eastern section of the congested metropolis to real estate developers,” he adds.
Agrees Ashok Mohnani, CMD, Ekta World. “The monorail in Mumbai will help connectivity within the city and boost real estate development along its corridors. This will also ease the pressure on other modes of transport like local trains and BEST buses in the city. For buyers and investors, these areas have become a good investment option looking at the rates that these areas are likely to command in the near future,” he adds.
(With inputs from Jharna
Mazumdar in Mumbai)