_Mumbai transport infrastructure and its impact on real estate
Residential market
As an extension of the 458 sq km of Mumbai city, the Mumbai Metropolitan Region (MMR) is spread over 4,355 sq km. In the last decade, the population growth rate of Mumbai was 3.9%, and 40.3% for the rest of the MMR. By contrast, around 80% of the 124 million sq ft of the region’s office space is in Mumbai. These dynamics make the long commute to work and back inevitable for a large section of the workforce in the MMR, and shape the real estate market as well. This is also reflected in the high price gradient of the residential properties in the region, which varies from `3,000–100,000 per sq ft. Such a huge price variation arises on account of multiple factors – commuting time to employment hubs and other places of importance, access to education, healthcare and entertainment avenues, location profile and gentry, etc. These factors vary across localities and so does the property price.
Transit infrastructure
Considering the high price gradient of `3,000–100,000 per sq ft, the concentration of office space in Mumbai, whereas high population growth in the rest of MMR, the role of infrastructure development, specifically urban transport projects, is significant.
The suburban rail network has been the primary mode of commuting to work in the MMR. Spread over a 319-km route across the Central, Western and Harbour corridors, a total of 2,813 train services are operated daily. The city’s suburban rail network ferries more than eight million passengers daily, which is likely the highest in any urban centre in the world. An astounding 0.6 million passengers travel during the busiest morning rush hour from 9 to 10 a.m. Similarly, 0.59 million passengers travel during the busiest evening peak hour from 6 to 7 p.m. Such a high traffic flow to employment centres places great importance on staying closer to the office markets. Accordingly, regions in the MMR that enjoy good connectivity (travel time and frequency) have witnessed flourishing property development.
The Mumbai Metro, considered to be an efficient and comfortable urban transport system, has now been integrated into the development plan for the Mass Rapid Transit System (MRTS). According to the 2004 Mumbai Metro Master Plan, 146 km of metro rail network has been envisaged for the city. Another 106 km is envisaged for the Navi Mumbai region. At present, an 11.40-km metro corridor has been operational since 2014.
Metro rail impact
Mumbai Metro Line 1 [Versova–Andheri–Ghatkopar (VAG)] was the first metro route in Mumbai, with a length of 11.4 km, which became ready for public use in 2014. Mumbai is a peninsular city, with the CBD at its southern tip and residential markets growing in the northern suburbs. The city saw its north–south connectivity develop as office markets such as Nariman Point and Fort got connected with the suburbs through the suburban rail network. However, the east–west connectivity lagged behind, and long detours through interchanges at locations such as Dadar and CST are required. The growing population in the suburbs led to the need for enhanced east–west connectivity. Hence, this VAG metro project addressed the need.
The impact of the metro development can be seen with reference to a residential market like Andheri East, which has been favourably impacted by the VAG metro corridor. The state government approved the project plan in 2004, and after several delays, the construction commenced four years later, in 2008. Till this time nothing changed on the ground as far as the desired benefits of this project were concerned. However, during this period, the Andheri East residential property appreciated by 185%, moving from `2,800 per sq ft to `8,000 per sq ft. A favourable property market cycle, coupled with the expectation of the benefits that would accrue to the residents, translated into a significant appreciation in the property prices in Andheri East.
The construction phase lasted six years, from 2008 to 2014. During this period, the ground situation remained the same as far as the project objective was concerned, and construction-related issues affected the quality of life for the residents. However, during this six-year period, residential property in Andheri East appreciated by 94%, from `8,000 per sq ft to `15,500 per sq ft.
At present, the VAG metro corridor aligns predominantly with the office markets of Saki Naka, Marol, Chakala and the Andheri–Kurla Road. The 11.4-km metro route has enhanced the much-needed east–west connectivity through an MRTS, and reduced the journey time between Versova and Ghatkopar from 71 minutes to 21 minutes. The micro-market of Andheri East witnessed a price growth of 638% between 2000, when the feasibility study was undertaken, and 2014, when the VAG corridor was opened for public use.
Akin to the first metro corridor of the city, i.e. VAG, we believe that the upcoming corridors will accrue similar benefits for the residential pockets in their influence zones. However, the intensity of the impact will vary across the corridors and depend on a host of factors, such as residential pricing, social and physical infrastructure, and employment opportunities.