Metro lines drive growth in Vietnam's TOD projects

Real estate development following transportation infrastructure represents an established trend in Vietnam's property market, particularly since construction commenced on the first metro lines in Hanoi (October 2011) and HCMC (August 2012). Throughout more than a decade of metro lines construction, both cities witnessed robust real estate activity. Numerous projects have emerged along these routes, which now represent 14-16% of total commercial supply and 4%-9% of residential supply in both markets.

Figure 1: Real estate supply along first metro lines vs. Total market (2012-H125)

Source: JLL Vietnam Research

Initially, the concept of Transit-Oriented Development (TOD) – which emphasises urban development connected to public transportation stations within a 1km walking distance - gained limited traction in Vietnam. Residents in Vietnam's major cities historically prioritised road connectivity to city centres via personal vehicles rather than public transit options. However, this perspective has undergone a significant transformation in recent years, coinciding with the completion of long-delayed metro projects that began operations in November 2021 (Hanoi) and December 2024 (HCMC).

Developments within a 10-minute walking distance of metro stations have experienced substantial price appreciation following the commencement of metro operations—approximately USD 200-250 per square meter over a one-year period. This translates to annual growth rates of 8% for metro-adjacent properties compared to 4% for the broader market in HCMC during 1H24-1H25. In Hanoi, the differential was even more pronounced, with metro-adjacent projects appreciating by 19% versus the market average of 12% during 4Q21-4Q22.

Figure 2: Apartment price trajectory of developments along first metro lines in HCMC and Hanoi (2012-H125)

Source: JLL Vietnam Research

The market's positive response to metro-adjacent projects has bolstered authorities' confidence in accelerating urban development according to the TOD model. Since 2023, the TOD concept has gained significant traction among both government authorities and developers, becoming a cornerstone in urban development planning and project marketing strategies.

Multiple criteria determine whether a development authentically follows the TOD model. Based on our market observations from a real estate perspective, successful TOD projects should build upon four fundamental pillars: linkages, non-motorized, amenities, and mixed-uses development.

Figure 3: Fundamental pillars of TOD Project

Source: JLL Vietnam Research

Currently, developers focus predominantly on direct physical connections between their projects and transit stations. Yet they often overlook how enhancing the connection experience through green spaces and non-motorized transportation infrastructure can significantly increase a project's value proposition. Most planned TOD projects in HCMC and Hanoi are located in suburban areas with substantial land banks, positioning them for township-scale development with multiple real estate components. Therefore, developers should carefully consider appropriate mixes of residential and commercial components. These should be complemented by strategic amenities that attract foot traffic from stations to their developments, rather than focusing exclusively on serving project residents.