New Metro rail links are changing the residential property scene in many Indian cities, such as Pune, Lucknow, Jaipur, Hyderabad, Mumbai, Bengaluru and Ahmedabad.
As localities get better connected, cities are expanding their peripheries and developers have been cashing in on this infrastructure development.
Connectivity is the sole factor that determines the success of the sector, says Abhinav Joshi, head of research at CBRE, a realty research firm. ‘The entire affordable-housing concept of the government will be a failure without MRTS (mass rapid transit systems). It is dependent on connectivity,’ he said.
This is a strategic point for developers, he says. ‘Builders advertise their projects based on the proposed Metro link, adding premiums because a well-connected neighbourhood will get them more traction. The working population is especially attracted. This is done based on the market value 5 years down the line.’
The Versova-Andheri stretch in Mumbai has seen 8-10 per cent appreciation in residential properties over a period of three years.
Similarly, in Bengaluru the average monthly rentals for a standard 2BHK house spread over 1,000 sq ft is currently Rs 18,000 in Whitefield, rising by 31 per cent since 2014 when monthly rentals were Rs 13,700.
Retailers also get a slice of the perks. Following the Delhi model, Mumbai has witnessed tremendous development across the Metro routes. Malls are now being used by retailers – hypermarkets and food and beverage operators. Quite often these are now favourite meeting spots for college students and working professionals.
Meanwhile in Delhi, traditional retail highstreets such as Chandni Chowk and Karol Bagh have also seen improved footfall due to the presence of Metro connectivity.
However, unlike residential projects that can hike their prices based on proposed Metro links, the office spaces reap the benefits only after the Metro line is functional.
Overseas property investors interested in India should research plans for new metro rail links, to take advantage of likely upswings in residential property values.