The role of Rail + Property in meeting the world’s urbanisation challenges

Today, more than half of the world’s population lives, works and socialises within cities. As populations increase, so does the trend towards urban living, bringing with it the dual challenges of housing huge numbers of new city dwellers and ensuring that cities’ transport infrastructures – often designed to cope with far smaller numbers than the current demand – are up to the task of transporting their populations.

Governments, city planners and administrations all over the world have devised numerous different solutions to this problem with varying levels of success. In Hong Kong, MTR Corporation has helped deliver one of the world’s most successful responses to this problem, combining the issues of transport capacity and property demand and providing a single solution to them both.

The key is a business model that MTR has called ‘Rail + Property’. This model sees the Hong Kong Government providing MTR with land development rights at stations or depots along new rail lines in exchange for a premium based on the land’s market value without a railway. This allows MTR to benefit from its investment in railways by being one of the beneficiaries from the property value increases that go hand-in-hand with the development of new railway lines and stations in otherwise unconnected areas.