Kolkata, Delhi, Bangalore, Gurgaon, Mumbai, Jaipur and Chennai have shown that the metro corridor brings about a positive change to the value of land. Marked by changes in land use and a flurry of activity that results in increased building density, the effect can be witnessed up to a kilometre away, and gradually decreases as the distance increases. In addition, depending on the location and appeal of the area, the property market values go north by more than 50 percent! Studies have also shown that consumers are willing to pay more for the added convenience of being close to a metro transit system—not just for speculative reasons, but because metro systems do contribute to increased commerce, better connectivity, better lifestyle, and reduced costs in terms of travel and time.
Look at the factors that cause increased building density along metro systems:
- Metro stations inevitably transform into urban transport hubs with numerous feeder services
- Commercial establishments vie for the increasing footfalls, and this has a visible impact on construction activity and prices
- Office space becomes a prime property along the metro corridor
- Builders seek to convert standalone residential units into a larger pool for the office-going and business communities with flats and apartments.
In fact, a flurry of new developments will continue to take place in vacant or open spaces that are up to a kilometre away. As developers capitalize on the profit implications of higher FSI in such areas, the demand for new properties becomes constant despite the rising land prices.
While all these developments may seem positive, it is important to regulate the building activity so that development is organized and area densification does not go overboard. While it is possible that residential lands will be turned to commercial land use (as commercial spaces will fetch higher rentals), the onus is on the builders and homebuyers to ensure that they do not end up living in a tactless business district.
Chennai shows the way in effective metro connectivity
In Chennai, the situation has evolved in a more positive manner. There is no rush among developers and homebuyers to invest more in the city centre. The metro, which integrates other forms of public transport including buses, suburban trains and MRTS, has enlivened the suburbs with better connection to the urban centre. Take the case of Siruseri where L&T’s integrated township apartments—Eden Park—is the setting trend in packaging lifestyle, convenience, and comfort for urban families. These are homes with all the aesthetics, serenity and modern comforts just a stone’s throw away from the SIPCOT IT park. Integrated townships such as L&T Eden Park are blazing the trail in the fast-paced urban growth and are changing the face of development.
Whereas in other cities, the impact of the metro could be felt up to a distance of about one kilometre only, in Chennai, the impact seeps through to up to a distance of 4-5 kilometres. This is entirely due to the integrated development of the metro system along with the other feeder transport systems. The impact has been such that families are considering settling down in these suburbs, far away from the business and commercial zones thanks to the rapid connectivity of the metro. This has spurred the developers to look towards the suburban extremes at the North and South of the city. Take for instance the case of North Chennai. For years, this region had limited real estate prospects and any appreciation of property prices. However, thanks to the metro, North Chennai is now a hub of real-estate activity. In fact, it is expected that metro will help in selling unsold properties, improve resale value, and turnover hitherto unoccupied commercial and retail spaces.
Of course, the metro has a huge impact on real estate prices along its corridor. When considered in the larger context, the metro helps in improving the standard of living of a large segment of urban population. Moreover, it is also a catalyst for changing the urban landscape with positive impact and growth.