As Namma Metro, running between six stations from M.G. Road to Byappanahalli, completes one successful year, Mahesh Khaitan analyses the connectivity factor that has influenced real estate prices in the city
The Bangalore Metro has been chugging along between M.G. Road and Byappanahalli for a year now. Ever since the operations began in October last year, the real estate market has seen a positive impact on some areas which are located near the Metro line.
These locations include Byappanahalli, K.R. Puram and C.V. Raman Nagar which have seen about 25 per cent appreciation in property values and rental rates. For instance, property prices, which were around Rs. 2,900-3,200 per sq. ft last year in C.V. Raman Nagar, have now gone up to Rs. 3,700-3,900. During the next year or so, the prices are expected to even touch Rs. 5,000 per sq. ft.
With another reach of the Metro expected to be operational next year, property prices in suburban Bangalore also could move north.
While the demand for real estate earlier was for areas like Indiranagar, due to its proximity to the Central Business District, people are now preferring to move towards K.R. Puram and Byappanahalli due to the seamless connectivity that Metro offers especially from the CBD area. There is a good demand for real estate in these areas now. Micro-markets such as K.R. Puram, Thambu Chetty Palya, C.V. Raman Nagar and surroundings of Old Madras Road still have land parcels available.
There are a lot of upcoming high-end projects in these areas such as Salarpuria Magnificia and a villa project by Hebron Properties but we would also hear a lot more being announced. Good connectivity will also ensure better response. There is also a good scope for appreciation in and around these areas in the mid and long term.
A rise, everywhere
Metro rail in its first phase has not helped the residential market alone. In fact, the commercial real estate market in the 6.7-km stretch has seen 15 per cent growth.
The prime concentration of commercial and retail real estate is in and around M.G. Road, Ulsoor, Indiranagar and Old Madras Road. Though the FAR around Metro stations was increased from 3.2 to 4, the retailers have not taken complete advantage of it as yet.
Many retailers who had moved out of CMH Road owing to Metro construction in the past few years are now coming back, and the area is witnessing a slow growth. Prices here are expected to grow 15-25 per cent when the second phase is completed as there would be excellent connectivity offering a fast and cheap mode of transport.
Rentals of commercial property too are slated to go up in the Metro corridor. Many new shopping areas along the Metro Rail will come up and there would be a paradigm shift.
Across the city, the real impact of the Metro can be seen only when the second phase is operational. Based on various studies, one can expect that there will be 20-30 per cent appreciation then.
M.G. Road in focus
Property on resale have seen appreciation in Indiranagar and surrounding areas, and there is good scope on M.G. Road. Prices in the surrounding locales have gone up by a greater margin than on M.G. Road.
The year 2012 has seen a significant growth in demand and supply in some of the areas alongside the Metro. Phase II will be operational in 2017 covering 72.09 km with 61 stations. The east-west corridor would be extended up to Whitefield in the east and Kengeri in the west, while the north-south corridor would now be extended up to the Bangalore International Exhibition Centre in the north and up to Anjanapura township in the south. When all these routes are functional, the price difference between the suburban locations and the city centre could diminish too. Over the next five years, we can expect an increase of 25 per cent in all segments — residential, commercial and retail.
(The author is the Head, Sattva Real Estate Solutions, a real estate market research group. He can be reached on firstname.lastname@example.org)