Bangalore Metro plans leasing out Station space to Retail Stores for revenue

Namma Metro StnBangalore: The Bangalore Metro is planning to lease out space at stations for large format stores to raise non-fare revenues, as it looks to keep fares low and meet costs of debt servicing.

While non-fare revenues constitute a significant part of operational earnings of metros worldwide, it is especially important in India where income levels are low.

Mindful of this, Bangalore Metro Rail Corporation Ltd (BMRCL) which operates Namma Metro (meaning ‘Our Metro’), is leasing out large spaces, earning revenue from hoardings, and even selling soil and rock extracted during construction. It also hopes to get permission for higher construction limits.

The metro is planning to lease out at least three areas of around 100,000 square feet each, identified at Peenya, Nagasandra and Jalahalli, that it says is ideal for large stores such as malls.

“All these are highly populated areas and there are no malls in the near vicinity of these three stations,” said Vasanth Rao, General Manager at BMRCL.

The company is also selling about eight acres at Byappanahalli and plans to lease out prime properties along the western end of rail lines at Vijayanagar and Mysore road, soon after starting services in these areas sometime in October. The company has already conducted trial runs on these lines.

BMRCL’s proposal to increase the floor area ratio (FAR) for construction along the metro corridor is pending with the state government.

“We are just waiting for final approval from the urban development ministry. If we get it, the notification for this will be issued,” said Rao.

The first phase of Bengaluru’s metro network consists of two corridors: Purple line running east-west and a green line running north-south. Only 19.1 km of the 42 km phase-1 is operational currently.

However, real estate developers said they were wary of projects in Bengaluru that involves government participation, including that of Bangalore Metro.

“From what we have seen, Metro is asking for a high price on rentals. Another negative factor for Metro projects is the fear about returns,” said N.A.Afzal, chairman of legal affairs at Bangalore Realtors Association, a real estate lobby group.

“The rented spaces are not getting enough footfalls to sustain large businesses. Until and unless it’s connected fully, it will be tough to do business,” he said.

The Metro is also leasing small areas in stations to commercial outlets. Some 15 kiosks of brands such as Cafe Coffee Day are operational now. Bids have been invited to set up 24 more and 50 more are being planned.

The Delhi Metro houses both large and small format shops such as McDonald’s, Cafe Coffee Day and Big Bazaar among others at many of its busy stations.

“We want to develop Byappanahalli station like the Habitat Center in Delhi, with facilities such as auditorium and theaters,” said Rao, to make it a “destination point” for people.