Mumbai's first metro railway link, which will connect the northwestern suburb of Versova-Andheri with Ghatkopar on the northeastern fringe soon, is expected to be a game changer for the megapolis' realty landscape, property consultant Jones Lang LaSalle (JLL) said today.
"Transportation infrastructure economics have historically proven to positively impact real estate value in cities like Mumbai because residential and commercial properties located close to transportation infrastructure tend to command a premium," JLL India COO Ramesh Nair said in a statement.
Areas which would benefit from metro connectivity have already seen a price appreciation of 400 per cent over the past eight years, and this trend is set to continue with the metro railway link's imminent launch, he said.
Incidentally, yesterday, the Railway Board granted its final approval to rail link operator Mumbai MetroOne, to commence its commercial operations on the 11.4-km line, which is expected to reduce travel time to 21 minutes, from the current 90 minutes between Versova and Ghatkopar.
Nair said that an independent analysis of pricing reveals that proximity to a metro railway station could single-handedly account for a 22 per cent variation in land value, besides factors like location, distance of the land from central locations and income groups.
He said that the execution of a string of surface transport infrastructure projects in the metropolis including the Jogeshwari-Vikhroli Link Road (JVLR), the Santacruz- Chembur Link Road (SCLR), Wadala-Chembur Monorail and now the Versova-Andheri-Ghatkopar (VAG) corridor would further stoke the already buoyant realty market of the city.
"Each of these transport infrastructure initiatives have had a major effect on the adjoining realty micro markets. The monorail had pumped up property prices in Chembur and Wadala by over 100 per cent in a short span of four to five years.
This also applies to the Santacruz-Chembur Link Road, with which the Chembur micro-market witnessed a perceptible price rise again," Nair said.
According to JLL, with the commencement of the project, surrounding regions would definitely experience a boom in terms of new offerings and price hikes, since developers' interest here has increased.
Rates for both the commercial and residential market would increase, since properties in northern and central secondary business districts (SBDs) as well as the Bandra-Kurla Complex (BKC) Central Business District are the most preferred locations for investors, he said. MORE PTI PSK BEN BA
In the long-term, Nair said value capture would be possible through increase in floor space index (FSI).
"If the proposal of granting FSI of 4 to areas near the metro is approved, it would have a far-reaching impact and potentially transform the entire landscape of areas surrounding it."
Mumbai MetroOne is a joint venture between Reliance Infrastructure, Mumbai Metropolitan Region Development Authority and French firm Veolia Transport.