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The Lucknow realty market is in for a major boost with the much-delayed Lucknow Metro rail project on track.
The project, estimated around Rs 15,000 crore, was given the go-ahead by the state Cabinet last week. The first phase, estimated at Rs 8,000 crore, is likely to be up and running by 2016-17.
Players are optimistic that once the project starts, local realty would become ‘hot property’, akin to what Delhi Metro did to the sector in the national capital region (NCR).
Besides, the state is also considering steps to unlock land value in the vicinity of the metro route by offering higher floor area ratio, flexible land use, etc.
“The real estate prices zoomed 200 per cent in Delhi over the last four years largely due to the Delhi Metro. Lucknow would experience a similar boom in the property market,” DLF Vice-President (operations) Rajeev Singh told Business Standard.
He said while the areas on the periphery of the metro route would see maximum appreciation in rates, faraway ones could benefit to the extent of 100 per cent.
Already Lucknow property rates have seen upward spiral with the circle rates hiked by almost 20-25 per cent effective from August 2013.
“If the metro project causes appreciation in land and property value, the circle rates would be revised accordingly. Presumably, the land prices would always go up with such development,” Lucknow district magistrate Anurag Yadav said.
Real Estate Developers Association of UP president Sudhir S Halwasiya said Lucknow property market, which had been sluggish of late, would definitely get an upsurge with the additional of this rapid transport infrastructure.
With explosive horizontal growth in major tier II and II towns across India, Lucknow being no exception, realty has been witness to steady organic and incremental growth on the demand for housing.
The suburban areas have been bursting at the seams with real estate projects, both by reputed national brands viz. DLF, Omaxe, Parsvnath etc, and local players.
The project would be funded 50:50 by the Centre and UP on the lines of Delhi Metro Rail Corporation (DMRC).
Both the joint venture partners would infuse 20 per cent each as equity in the project, while the rest of the funds would be raised through debt. A sub-committee had already been constituted under Rajiv Aggarwal, state housing secretary, to identify alternative sources of funding.
“It would be difficult to quantify the extent of appreciation in the local property market, as it would depend upon a number of factors, but there would be a lot of tangible and intangible benefits of the metro,” Aggarwal said.
