Standing at the Guogongzhuang Depot of Metro Line 9 outside the South Fourth Ring Road in Beijing, besides the crisscrossing steel tracks, one can also see an endless parking garage. People might not imagine that someone is going to build houses on the roof of the metro garage. Recently, the Beijing Infrastructure Investment Land Co., Ltd. consortium (Beijing Infrastructure Investment & Yintai Co., Ltd. and Vanke Group) has acquired the overbuild land of this metro depot and parking lot through bidding, and has started developing residential and commercial facilities. This is the "metro overbuild development model" widely known in Hong Kong.

　　Fiscal investment, government debt, bank loans, land transfer, development along the line... Behind the normalization of these metro construction financing methods, all sectors of society are expecting more diversified funding sources. It is against this background that the "metro land creation, generating wealth to support rail" model has emerged as an exploration to meet the huge investment demand for metro construction. As of now, Beijing's total metro mileage has reached 442 kilometers, making it the city with the longest metro lines in the world. According to the "Recent Construction Plan for Rail Transit in Beijing", the Beijing Infrastructure Investment Co., Ltd. (referred to as BII) estimates that during the "12th Five-Year Plan" period, Beijing's metro construction requires 350 billion yuan in funding.

Rendering of a metro overbuild project

　　Developing real estate on metro garages is a new model of intensive land use.

　　"Each metro line has one depot, occupying hundreds of thousands of square meters of land. If it only 'houses' the metro but not people, it's a pity. The land planning and design for 'overbuilding' on depots is actually to explore the feasibility of comprehensive land utilization," said Zhang Ting, who is in charge of the design of the Guogongzhuang Depot project.

　　The Guogongzhuang metro garage is comparable in scale to the Water Cube, about four or five stories high. But the biggest difference between this "overbuild" and ordinary buildings is that the roof slab itself is one story thick.

　　Metro overbuild development actually means constructing civil buildings on top of the parking garage at the metro terminus, which is 9 to 13 meters above the ground. This mixed-use building, from bottom to top, consists of a foundation, metro garage, automobile garage mezzanine, and residential floors, forming an "overbuild property". For Beijing, where land is increasingly scarce, this is undoubtedly a new model of intensive land use.

　　"Improving land use efficiency, reducing metro investment costs, and replenishing fiscal funding sources for metro construction—these many benefits of developing metro overbuild projects are the reasons why BII is determined to 'eat the crab'," said Hao Weiya, deputy general manager of BII. However, BII's main business is metro investment and financing, and real estate development is not its strength. For this reason, BII Yintai chose to cooperate with Vanke.

　　Xiao Jin, deputy general manager of Beijing Vanke, introduced that the depot overbuild project must meet very strict standards in terms of metro operation safety, exit planning, project greening, as well as building shock absorption and noise resistance. As a result, such projects require higher costs than ordinary residential or commercial projects. Xiao Jin said: "Just for community greening alone, whether drainage facilities or irrigation facilities, it is more complex than building a community on the ground."

　　In building metro overbuild projects, the government obtains land value-added revenue while also building affordable housing in tandem.

　　In Beijing, for the construction of a new rail transit line, the municipal finance must first provide metro construction funds equivalent to 40% of the total investment, and the metro owner unit, BII, needs to complete the remaining 60% of financing.

　　Without the metro depot overbuild project, the government would allocate land for transportation infrastructure without any land revenue. The metro overbuild project not only brings certain land value-added revenue to the government but also includes the simultaneous construction of affordable housing. The developer acquiring the land can "feed back" to the metro through commercial development by studying the project construction plan.

　　Taking a metro overbuild development project with a base price of 3 billion yuan (similar in scale to the Guogongzhuang Depot) as an example, 1 billion yuan is the land transfer value-added revenue obtained by the government. These funds will flow back to the municipal and district-level financial pools and will ultimately be mainly used for metro and affordable housing and other livelihood projects; the other 2 billion yuan is the guaranteed cost to ensure that the comprehensive land utilization entity (BII) receives full compensation: adding the garage roof costs about 500 million yuan, demolition costs about 1.3 billion yuan, and related taxes and fees.

　　After the transaction, the comprehensive land utilization cost of 2 billion yuan will be returned to BII, and BII will then hand over 1.3 billion yuan to the metro line project company to offset metro construction costs.

　　In addition, the winning secondary developer must also build 50,000 square meters of affordable housing according to regulations. For this alone, the government can reduce construction land costs by about 1 billion yuan.

　　Metro overbuild projects can provide sustained returns for the regional economy.

　　In metro overbuild projects, not only does the government benefit considerably, but the land-acquiring developers and local villagers also gain. "The one-time sales revenue of commercial housing is short-term income. In the long run, metro overbuild projects can also provide sustained returns for the regional economy and gradually improve residents' living conditions," said Hong Tao, a commercial expert at Beijing Technology and Business University.

　　To this end, the bidding for the Guogongzhuang plot clearly stipulated that the winning developer must build 30,000 square meters of office buildings for Guogongzhuang Village on a turnkey basis, which the village will repurchase at 8,952 yuan per square meter for developing collective industries within the village and providing villagers with a long-term source of income. The 30,000 residents who will move in in the future are also a strong driving force for the project to deeply tap commercial resources. To this end, BII Yintai has pre-contacted large supermarkets and office building tenants and absorbed local labor for employment.

　　Based on the land transfer price, the floor price of commercial housing in Guogongzhuang is about 13,000 yuan per square meter. Currently, the price of new homes in the area is about 35,000 yuan per square meter. Industry insiders analyze that the net profit from the project's opening sales is expected to exceed 1 billion yuan. Public information shows that in Beijing Infrastructure Investment & Yintai Co., Ltd., BII holds about 30% of the shares. "The profits will be distributed according to the proportion of shareholders' capital contributions, and BII's share will still be used for metro construction investment," said Hao Weiya.

　　According to preliminary estimates, in the Guogongzhuang project, the new available metro construction funds from the government and enterprises amount to about 700 million yuan. A relevant person from the municipal planning department revealed that the depots of existing lines that were put into operation early basically do not have the conditions for renovation. The Yushuzhuang Depot of Metro Line 16, which has been publicly announced, is likely to continue exploring the metro "land creation to support rail" model.