RESEARCH URBAN TRANSPORT UNLOCKING THE REALTY POTENTIAL MUMBAI METROPOLITAN REGION INFRASTRUCTURE DEVELOPMENT ANALYSIS TABLE OF CONTENTS Introduction 4 How does the MMR and Mumbai city compare with each other? 6 What are the characteristics of the residential micro-markets in the MMR? 6 What drives the MMR residential market? 9 What are the implications of the infrastructure development in the MMR? 11 Metro rail corridors 12 Coastal Road project 14 Mumbai Trans Harbour Link (MTHL) project 20 “URBAN TRANSPORT” UNLOCKING THE REALTY POTENTIAL RESEARCH Introduction Sustaining the country’s rapid urbanisation would require corresponding infrastructure development. The need for infrastructure development, particularly urban transport, in a megapolis like Mumbai, is unquestionable. While the benefits of urban transport in terms of enhanced connectivity and an improved quality of life have been widely recognised, unlocking the realty potential in terms of better development prospects is also an interesting arena for stakeholders. In fact, the high price gradient of `3,000–100,000 per sq ft for residential property in the MMR makes it even more important to stay ahead of time and decipher the impact of infrastructure development on property demand and the resultant impact on prices. With this white paper, we provide an assessment of select urban transport projects that are high on the state government’s priority list and also have an ambitious yet attainable completion target of 2019, which is within the term of the present government. Accordingly, an assessment of the metro corridors of Dahisar West–DN Nagar, Andheri East–Dahisar East, the Coastal Road and the Mumbai Trans Harbour Link has been presented in the report. The report is structured in a manner that provides an understanding of the market dynamics of the residential micro-markets across the MMR, followed by the real estate drivers – employment, physical infrastructure and social infrastructure. Specifically for the purpose of this white paper, it dwells on physical infrastructure development and its impact on residential demand and prices. 4 5 How does the MMR and Mumbai city compare with each other? The Mumbai Metropolitan Region Chart 1: Population growth The Mumbai Metropolitan (MMR) is spread over an area of 4,355 Region (MMR) is spread over sq km, which includes 458 sq km of the Mumbai City district and the rest an area of 4,355 sq km, which 22.8 includes 458 sq km of the comprising regions in the Thane, Palghar 12.4 19.3 Mumbai City District and the and Raigad districts. The population rest comprising regions in the of Mumbai increased from 11.9 mn in 11.9 Thane, Palghar and Raigad 2001 to 12.4 mn in 2011 - a decadal districts. growth rate of 3.9%. The MMR’s growth was much higher, at 17.8%, taking its population from 19.3 mn to 22.8 mn during the same period. With the Arabian The population of Mumbai Sea to the west, the MMR consists of increased from 11.9 mn in eight municipal corporations and nine 2001 to 12.4 mn in 2011 - a municipal councils. Source: MCGM decadal growth rate of 3.9%. The MMR’s growth was much The Mumbai Metropolitan Region higher, at 17.8% Development Authority (MMRDA) is the bodies in the MMR, among which the apex planning body for the MMR. There Municipal Corporation of Greater Mumbai are also several municipal governing (MCGM) is the most significant. What are the characteristics of the residential micro-markets in the MMR? The MMR is divided into smaller micro-markets to understand each locality in terms of their respective demand drivers - i.e. their occupation profiles, connectivity with employment hubs, physical and social infrastructure development, and cost of real estate. Thus, from the residential real estate market perspective, the MMR is divided into eight micro-markets, as follows: Micro-markets Indicative locations Dadar, Lower Parel, Mahalakshmi, Worli, Central Mumbai Prabhadevi Sion, Chembur, Wadala, Kurla, Ghatkopar, Central Suburbs Vikhroli, Bhandup, Mulund Vashi, Nerul, Belapur, Kharghar, Airoli, Panvel, Navi Mumbai Ulwe, Sanpada Kalyan, Kalwa, Dombivli, Ambernath, Peripheral Central Suburbs Bhiwandi, Mumbra, Karjat Vasai, Virar, Boisar, Palghar, Bhayandar, Peripheral Western Suburbs Nalasopara Malabar Hill, Napean Sea Road, Walkeshwar, South Mumbai Altamount Road, Colaba Naupada, Ghodbunder Road, Pokhran Road, Thane Majiwada, Khopat, Panchpakhadi Bandra, Andheri, Goregaon, Kandivali, Borivali, Western Suburbs Santacruz, Vile Parle, Dahisar 6 “URBAN TRANSPORT” UNLOCKING THE REALTY POTENTIAL RESEARCH Chart 2: Zone-wise split of under-construction residential units Central Mumbai has emerged as a prominent residential market on the back of exceptional office and social infrastructure developments in the last decade. This micro- market is now a premium office market for occupiers from the Banking Financial services and Insurance (BFSI) front office segment and corporate Source: Knight Frank Research headquarters of companies in the manufacturing, media and Jacob Circle (11.2 km), is operational by consulting sectors. South Mumbai 2016. This will increase the attractiveness This zone houses the city’s central of this market even further and ease business district (CBD), comprising the burdened traffic conditions in the With the Mumbai Metro Nariman Point, Colaba, Cuffe Parade, densely-populated locations of Dadar, becoming operational in the Fort and Ballard Estate. Mumbai is the Parel and Lower Parel. Central Suburbs, the MRTS business capital of the country, and connectivity to the Western the CBD is home to a large number of Central Suburbs Suburbs has improved. corporate headquarters. The Bombay Stock Exchange (BSE)—the oldest The Central Suburbs extend from Sion to stock exchange in Asia—and some of Mulund. This zone has good social and the biggest Indian companies, such physical infrastructure, and the presence The region from Bandra to as Reliance Industries Limited, State of several organised retail options on LBS Dahisar towards the north of the Bank of India and Larsen & Toubro, Road has added to the appeal of the city is identified as the Western operate from their headquarters here. residential developments in the region. Suburbs. It houses the Bandra The residential pockets in this zone, the Mumbai Metro becoming operational Kurla Complex (BKC), which is such as Cuffe Parade, Napean Sea in the zone, the MRTS connectivity to the a planned commercial hub that Road and Malabar Hill, are among the Western Suburbs has improved. has the country’s largest stock most expensive in the country. With the exchange—the National Stock Arabian Sea on three sides and a lack Western Suburbs Exchange (NSE)—and of land availability, there is limited scope The region from Bandra to Dahisar important offices, such as the for horizontal expansion in this zone, and towards the north of the city is identified Consulate General of the United the only way for large-scale real estate as the Western Suburbs. It houses the States and the British Deputy development is by going vertical. Bandra Kurla Complex (BKC), which is High Commission. a planned commercial hub that has the Central Mumbai country’s largest stock exchange—the Central Mumbai has emerged as a National Stock Exchange (NSE)—and prominent residential market on the important offices, such as the Consulate back of exceptional office and social General of the United States and the infrastructure developments in the last British Deputy High Commission. BKC decade. This micro-market is now a is now considered the new CBD of the premium office market for occupiers MMR. The other significant office stock from the Banking Financial services and in this area is on the Andheri Kurla Road Insurance (BFSI) front office segment and and along the Western Expressway up corporate headquarters of companies in to Malad. Bandra and Juhu are the most the manufacturing, media and consulting sought-after locations for residential sectors. The Mumbai Monorail will pass development and command the highest through this micro-market once its property prices here. This zone has a second phase, connecting Wadala and vibrant social infrastructure, with the 7 presence of quality retail, education, Thane is connectivity, primarily through the entertainment and healthcare options. suburban railway network. While these Property prices decline as one goes After being considered a poor cousin distant suburbs provide affordable north from Bandra. While employment of Mumbai’s suburbs for a long time, housing options, they are not self- and social infrastructure are the drivers Thane is now earning a reputation for its sustainable with respect to employment up to Malad, locations further north quality residential developments on the opportunities. With the absence of are driven by connectivity, primarily by back of its improving physical and social employment hubs in this zone, residents the suburban railway network and the infrastructure. Ghodbunder Road has have to travel to employment hubs in Western Express Highway. developed as an arterial road connecting Mumbai, and are thus dependent on the the eastern and western express rail network. Peripheral Western Suburbs highways. The Thane MIDC is the oldest of over 200 industrial development Navi Mumbai The markets extending from Mira- corporations (IDCs) in the state. However, Bhayandar to Boisar have been classified with manufacturing activities diminishing Developed as a planned satellite city as the Peripheral Western Suburbs. in the urban centres, it is no longer of Mumbai, this zone is emerging as Although localities such as Palghar the biggest driver in the region. The a self-sustained real estate market on and Boisar are not part of the MMR, employment hubs in Mumbai are the account of the presence of employment they have been considered from an primary employment drivers. Further, opportunities, primarily in the IT/ITeS analytical perspective on account of the with IT/ITeS giants evincing interest in sector. While CBD Belapur has been improving suburban train connectivity Ghodbunder Road, Thane is witnessing planned as an office development hub, over the last decade.