Sri Lankan government’s proposed Light Rail Transit project in Colombo to increase property prices
A local media report referring to a recent study by leading global real estate consultancy Jones Lang La Salle (JLL) has stated that the proposed Colombo Light Rail Transit (LRT) project has resulted in the widespread speculation on its effect on the price of property within close proximity to the line.
Taking into consideration various factors and an accumulation of relevant statistics, JLL has reportedly evaluated the relationship between this new infrastructure development and the value of real estate in Colombo.
JLL Lanka (Pvt) Ltd. has reportedly considered both, history, and global case studies, for similar infrastructure improvements, in other geographies around the world – namely those in cities such as London and Dubai.
According to the report, closer to home in the monocentric city of Colombo, the urban population currently accounts for approximately 48% of the total population which is projected to increase to 72% by 2033. This rapid pace of urbanization underscores the need for discovering alternate channels to leverage the city’s workforce and increase efficiency, thereby improving the standard of living of its citizens on par with the rest of the world’s leading metropolises.
If Colombo is to alleviate chronic congestion issues and move towards a more sustainable, environmentally friendly, polycentric model with the intention of improving living standards for residents and driving commercial efficiencies for businesses, an integrated LRT system will prove to be vital to these goals.
The report has noted that the suburb of Malabe, according to online data, already enjoys projected, year on year, land price increases of 16%, with per perch prices already approaching LKR 1 million. This is partly due to good access to the southern expressway, and the proliferation of high tech IT and business parks providing excellent employment prospects for graduates from nearby educational institutions.
Construction of the LRT is scheduled to commence as early as 2020 at a cost of US$ 1.7 billion – funded by Japanese government loans, and re-payable over 40 years, at 0.1% interest, and with a 12-year initial grace period.
The first line – travelling from Fort/Pettah to Malabe – is projected to begin commercial operations in 2024 and promises a considerably reduced travel time of approximately 30 minutes between the two termini. Phase 1 is reported to be fully elevated, with a total of 16 stops over the 15.3 km length of the line.
The LRT once completed would result in the development of many areas along the line. It would also result in the development of new townships and other supplementary infrastructure projects. Therefore, the land value in areas close to the LRT line would see an increase. It would hence be wise for businesses/investors to look at buying land along the LRT even for future projects.
|Article Code :||VBS/AT/09082018/Z_4|