TOD model essential for real estate
TOD model essential for real estate
Transit-oriented development, an urban model based on public transportation, will create more opportunities for Vietnam’s urban development.
Offices close to metro lines are witnessing bumped-up values, Photo: Le Toan |
According to Nguyen Anh Tuan, head of the Technical Infrastructure Management Division at the Ho Chi Minh City Department of Construction, transit-oriented development (TOD) is not simply an investment in transport but also involves urban planning, with the goal of optimising land and building high-density areas around transportation stations.
“The trend of investing in real estate development based on infrastructure is not new but will be a driving force for Vietnamese real estate businesses. Infrastructure breakthroughs serve as a launching pad to increase value and liquidity for TOD projects through a developed transportation network,” Tuan said.
With the first metro lines, the real estate markets in Hanoi and Ho Chi Minh City have both recorded an increase in selling prices for projects located near these transport routes since they came into operation.
According to Dinh Minh Tuan, director of Batdongsan.com.vn, potential TOD real estate projects in the south are often located near metro stations within a small radius, integrating multi-functional housing, commercial, and office spaces with convenient transport connections and environmentally friendly designs.
“These projects not only meet the needs of modern urban living but also add value due to the appeal of efficient public transportation, attracting both homebuyers and investors,” Tuan said.
In Hanoi, real estate projects around metro lines 2A and 3 within a 500-metre radius saw sharp price increases – up 40 per cent on-year – following their operation in 2024. Notable beneficiaries include Discovery Complex, Mipec, and Indochina Plaza Hanoi.
Similarly, in Ho Chi Minh City, Masteri Thao Dien and Masteri An Phu, located close to the metro line, have doubled in price compared to the same period in 2024.
Although the current form of the TOD model in Vietnam is limited to individual projects, in the future, the broader urban development model centred on public transportation is expected to thrive.
In Hanoi, public transport-oriented urban development is outlined in Clause 1, Article 31 of the Capital Law 2024. Meanwhile, Ho Chi Minh City People’s Committee has issued a plan to develop 11 compact urban areas under the TOD model along two metro lines and belt road 3.
The initiative will be implemented in two phases. The first phase will focus on developing nine locations nearby. The second phase, from 2026 to 2028, will expand TOD areas, particularly in Hoc Mon along Belt Road 3 and Binh Chanh district, which is part of the metro line 3 extension and the Ho Chi Minh City-Can Tho railway line.
According to the plan, in the second and third quarters of 2025, land boundaries, planning, and legal frameworks will be determined. Investor selection procedures are expected to be completed by early 2026. Meanwhile, catching up with the TOD trend, the southern province of Binh Duong has launched the A1 Cultural Commercial and Service Area complex, marking an important step forward in improving the transportation system and regional connectivity.
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Kate Hardwick, strategy lead, Southeast Asia, Arup Today’s TOD is not just about integrating transportation and land use. It is a transformative approach to urban development, attracting investment and talent while reshaping the city’s landscape. The lessons from applying this model will be a significant opportunity for Vietnam to build a dynamic and vibrant city. It’s difficult to do TOD in an existing city, but as we apply new digital tools, new approaches, it’s going to make it a lot easier. One of the problems that other cities have in applying TOD is that they have early applied the basic principles in real estate development. This is also an opportunity for the private sector to develop real estate integrating into the model. However, this model has also caused a series of real estate projects to be implemented at the same time, leading to supply exceeding demand to a certain extent, making it more difficult to engage tenants. Therefore, we must also be very cautious in promoting the stages of development. Furthermore, the TOD model must be introduced from the first stages of the development process, or as early as possible. Because investors do not always have ready capital within five years, they need incentives from a very early stage of development. If we do like that, private investment in TOD and real estate projects will be much more effective. Bui Thi Phuong Hien, CEO, SonKim Land As one of the investors who have real estate projects following the TOD model, we confidently say that we are pioneers in insightful researching and have great ambitions and dreams about TOD investment. Because TOD is closely related to sustainable development. Sustainable development is not just a beautiful word for us to abuse, but in fact it is the cash flow story of real estate businesses. Today, real estate businesses with long-term potential realise the need to diversify housing types, not just focusing on expanding housing funds. For sustainable development, businesses are required to proactively research the development models of leading countries in the world in conjunction with their own understanding and analysis to form TOD projects that suit the needs of consumers in Vietnam. Today we are committed to accompanying the State and all relevant entities to approach the TOD story. We propose that the implementation of TOD requires the companionship of businesses right from the early stages of developing policies. Because if we do not have the voice and vision of businesses in the policy and strategy development stage, there will be a lack of practice. In addition, the types of land funds suitable for developing the TOD model need to be clearly classified and at an early stage, to have enough time and conditions to deploy this model effectively. |
- 10:32 11/03/2025
