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
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.