delhi case study

8/3/2019 Delhi Case Study

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Impact of Delhi Metro onImpact of Delhi Metro on

Real EstateReal Estate


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Transportation Investment ImpactsTransportation Investment Impacts

Direct economic benefitsTravel Time savings, vehicle cost savings, transit option

value, environmental benefits

IndirectIncrease in property values

Land use changes,

Benefits of improved access to jobs & critical locations,

benefits to employment wage & productivity


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Research FocusResearch Focus

Analyse land value changes

OverTime Project Stage Project Formulation stage (year 1990-1996)

Construction stage (1996- 2000) and

Post project (2001-2006)

Over space City Level Across different areas/localities

With in localities

Decompose land value increases to metro

and non-metro effect

Comment on Value Capture


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ImpactsImpacts Other CasesOther Cases

Tyne & Wear Metro, Newcastle, U.K, Manchester Metro link, London

Docklands Light Railway, Helsinki Metro, Finland, Vienna S-Bahn,

Austria, Nantes, France

House prices increased 2% within 200 meters of metro stations.

Retail activity or office developments in proximity to stations does

not appear to be directly linked to LRT.

Development of 20,500 sq.m of offices and services in City centre.

50% of capital cost was recaptured through overall office

development and job creation.

In the best locations, dwelling prices raised by 11%.

Price of property located within walking distance of the nearest

railway or metro station increased 7,5% over other locations.

Impact was most significant at a distance of 500-750 m, asopposed to adjacent locations, where values dropped. (Finland)

Districts located along S-Bahn corridor have witnessed increases

in number of new housing units of 18.7% over 10 yr. period, as

opposed to 4% and 10% in more remote locations.


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Delhi Mass Rapid Transit ProjectDelhi Mass Rapid Transit Project

An OverviewAn Overview

Total four phases, firstphase complete.

Total length of first

phase 50 km

Total cost of first phase

25550 million

Cost per Km of first

phase 511 million rupees

per km

Total length of full

system 167 km

Total capital cost offull system : 53775

million

Return Expected from

Property Development :

Rs 1533 million


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Study Area DetailStudy Area Detail

LAND AS A RESOURCE FOR URBAN INFRASTRUCTURE DEVELOPMENTFOCUS ON TRANSPORT SECTOR


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1.a. Land values as a function of distance1.a. Land values as a function of distance

from CBDfrom CBD

20052005

20002000

19961996

19901990

With Metro becoming operational, The curve is becoming flatter

Land values in periphery is increasing

Changing Urban Structure Alternate CBDs

The effect of improved access!!


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1.b. Land values as a function of distance1.b. Land values as a function of distance

from CBDfrom CBD

20052005

20002000

19961996

19901990

CommercialLandValues

Distance from CP


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2. Inter Zonal Analysis2. Inter Zonal Analysis

Inter-zonal Analysis (16 zones)

Intra-zonal Analysis

ZonesA: Old City E: East Delhi

B: City Ext (Karol Bagh) G: West Delhi

C: Civil Lines H: NW Delhi

D: New Delhi K: Dwarka


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Inter Zonal AnalysisInter Zonal Analysis Increase Land ValuesIncrease Land Values

Residential LandResidential Land

ValuesValues

Commercial LandCommercial Land

ValuesValues

Zones A, B, C, D have above

average growth rate till 2000, due to

location advantage.

Since 2000, only B maintained its

average growth rate, as compared to

A,& C, as it has residential

component, whereas zones A & C

have more commercial areas.

With coming of Metro, the zones invicinity of Central Zones (A,B,C,D)

also have above average growth rate

in land values.

The zones which were far from

theses prime zones, also attained land

value increase.

Zones G,H,K, have higher growth

rate as compared to the zones in

vicinity of central zones

Zone E has seen significant increase

in commercial growth.


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3. Land values and distance from metro3. Land values and distance from metro

Land value changeanalyzed in belts

along metro line:

a: 1000m

Zone A shows saturation in residential areas as there is no effect of

distance on land values.

In the peripheral zones E,H and K which are in developing stage;

impact is high and clearly visible.

There is an average decrease of 8-10% and 15-18% in values as we

move from belt a to belt b and c respectively


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IntraIntra--zonalzonal analysisanalysisLand value analysis by subzones for

zones E,G,H & KVariation by time (before and after

project completion)

Variation by land use

Variation by distance from metro

Most properties in all zones

lie between 10,000/- to20,000/- per sqm.

Besides the Metro facility,

there are other factors which

affect the land value.

To assess degree of impact

of metro on land values, a

more detailed regression

analysis done using other

factors like:location, dist from metro

line, yrs of metro operation,

infrastructure availability,

nature of development.


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Inter Zonal AnalysisInter Zonal Analysis Zone E (East Delhi)Zone E (East Delhi)Till 1962, only one road cum rail bridge, was

link between city & Trans Yamuna Zone.

Most of the area was vacant, except oldsettlements such as Shahdara, Geeta colony.

Development of 3 more road bridges

(Indraprastha bridge, Wazirabad bridge, &

Nizzamuddin bridge), lead to development of

unauthorized colonies at the entry point of these

bridges, due to its proximity to walled city CBD,

Connaught place etc.

Population in zones E1 & E2, is

highest, since 1981, as these have

the only connection of road cum

rail bridge, unauthorized,

regularized 20 and have colonies.

% increase in population in E1 & E2, is less as compared to the other far off

zones, as these mainly are unauthorized regularized colonies


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Intra Zonal AnalysisIntra Zonal Analysis Zone E (East Delhi)Zone E (East Delhi)

An overall increase in land values since 2004-2005.

Zones along the metro route, have shown comparatively higher rise.

Zones near to the metro route in E Zone mostly has unauthorised regularised

colonies, slums, poor infrastructure.


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SummarySummary1. Distance from Metro

HedonicAnalysis: The variables which are having a significant impact

on land value are:Distance of land from Metro Line

Distance of land from CP

Location of area

Income group

Among the variables distance from the metro alone explains the 22% of thevariation in the land value. Thus, the availability and proximity to metro, plays a

major role in determining the impact of Metro on real estate prices.

Properties within 500m of the metro line have experienced a higher land value

change as compared to properties beyond 500m. Land value decreases as one

moves away from the metro line.

Within 500 mtrs of Metro Line, change in land value is higher and is more or

less same for both the residential and commercial properties.

Between 500m to 1km, change in land value is more for commercial properties.


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SummarySummary

2. Land use Effect

The impact of metro on residential land value is less as compared to the

commercial properties.

For Residential area, on an average land value within 500m of metro line

increased by11.3%. For Commercial area, on an average land value within 500m

of metro line increased by 18.1%.

Threshold limit for the residential properties is approximately up to 500m from

metro line, whereas limit increases up to approximately 800m for commercial

properties.

Increase in land value is highly dependent on the income of the people

occupying the area. These are also the areas which are planned.


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SummarySummary3. Number of years of Operation of Metro

Land Value changes are more consistent and higher after the operation of metro as

compared to the construction and planning stage. (land value increases by 2- 4%

every year.)

ConclusionConclusion

Impacts on urban structure is significant. Integrated land use transport planning.

Metro contribution to land value rise is about 22%. A part value is captured in

property taxes. Re-appropriation is difficult as there are 2 different agencies.

Value capture is possible only if linked to additional FSI/TDR.

To reap benefits of better accessibility, redevelopment schemes for non-

planned/slum areas.

Right time to capture value First Create Value and then Capture


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Sub zones E8, 12, 13 which are one of the oldest, planned areas in E zone, have the

highest rise in commercial land value, though they are far from the metro.

Among the sub zones near to the metro, only zones E1 & E4 have shown, a

markable rise in land values.


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161616

Sub zones lying within

1.5 km of metro line


Characteristics

High Density Area

Road width 5m to 7m

Very few developed open spaces

Metro line abutting GT road, & rail line, which are

one of the oldest linkages for the area to the main city


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G-1 G-2 G-3 G-4 G-8 G-9 G-10 G-13 G-14 G-

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delhi case study

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