Chennai Metro project’s progress, including the announcement of Phase II with three new corridors, has cheered stakeholders across Chennai’s real estate market. 99acres.com analyses the impact of the mega project on the city’s realty prospects.
Armed with the potential to overhaul the connectivity scenario in the city, the Chennai Metro has been a major breakthrough. The project is expected to be integrated with various other modes of transport, such as the suburban rail network and bus services, in the near future. It is expected to drastically cut down the commute time across Chennai, providing a major fillip to the real estate potential of micro-markets located along the metro routes.
Project details of Chennai Metro
Phase I of Chennai Metro, covering about 50 km at an estimated cost of Rs 18,000 crore, has two corridors:
- Chennai Central–St Thomas Mount
- Chennai airport–Wimco Nagar
The Chennai Central–St Thomas Mount line was the first to be opened to the public. In addition, while the route from Chennai airport to Washermanpet has been completed, the stretch extending from Washermanpet to Wimco Nagar is expected to become operational by 2020.
With the total cost pegged to cross Rs 85,000 crore, the proposal for Chennai Metro Phase II includes three corridors:
- Light House–Poonamallee
- Perumbakkam–Wimco Nagar
Impact on real estate
Since the announcement of the metro routes, developers have been rushing to cash in on the growth prospects of the surrounding localities. The impact is already visible along the operational stretches, asserts Karthikeyan B, a city-based property consultant.
- Traffic reduction: According to the latest Insite report (Apr-Jun 2017) by 99acres.com, the recently completed stretch between Thirumangalam and Nehru Park led to a surge in land values due to a resultant reduction in traffic congestion in the Central Business District (CBD), south Chennai, and in pockets near the airport. Experts add that the extension of the Light House line till Poonamallee, passing through Vadapalani and Porur, will help ease traffic congestion in Virugambakkam and Valasaravakkam areas near Arcot Road. The coming quarters are likely to witness greater traction in all these micro-markets from both buyers and tenants.
- Capital appreciation: Industry experts anticipate a 45 percent price appreciation along the Guindy-Alandur stretch by 2020.
- Rental market: The impact of the metro has also been witnessed in the rental markets along the metro corridors. The 99acres’ report stated that localities connected by the metro have been receiving greater traction from the tenant community. For instance, Anna Nagar West and Vadapalani recorded rentals rising by 12 percent in the second quarter of 2017 as compared to the same period in 2016. Vadapalani even witnessed capital ‘asks’ growing by four percent, QoQ, on the back of enhanced connectivity.
Meanwhile, the 108 km long second phase of the project will connect the northern and southern suburbs of Chennai. North Chennai, in particular, will witness a boom in real estate on the back of industrialisation and job creation catalysed by greater connectivity. This anticipation helped Madhavaram in North Chennai emerge as the top grosser in Apr-Jun 2017 with a six percent quarterly growth in capital values.
Localities to look out for
The intersections of the metro lines of phases I and II are expected to reap the greatest benefit of the infrastructure project. Experts anticipate Madhavaram, KMC, Thirumayilai, Sholinganallur, Nandanam, CMBT, Alandur, Vadapalani, and St Thomas Mount to witness significant hikes in demand for both primary and resale markets in the near future. In addition, Anna Salai could turn into a realty hub for both residential and office space segments due to its strategic location and excellent connectivity.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. 99acres does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.