Metro operations will support sustainable urban development goals over next decade: Savills

Transit-Oriented Development (TOD) is no longer merely a market buzzword, but an emerging high-value function, contributing to improved quality of life, attracting residents, and laying the next decade of foundation for sustainable growth of Vietnamese cities, write Savills Vietnam analysts.

Hanoi's permanent population will reach 11 million, with urbanization increasing to 70%, placing significant pressure on the existing transport infrastructure and urban land supply, according to the city's Capital Master Plan to 2030.

In Vietnam, Transit-Oriented Development (TOD) is a widely discussed topic in urban planning and real estate. This infrastructure reflects a shift in urban development thinking, particularly in major cities such as Hanoi and HCMC, as local authorities must address rapid population growth, prolonged traffic congestion, and long-term sustainability requirements.

The National Assembly and Government’s introduction of specific mechanisms and policies for metro development shows that TOD is no longer just a concept, but has become a clear policy direction, providing a foundation for medium- and long-term implementation.

In Hanoi, the realization of TOD has begun to take shape through metro lines that are under construction or planned. Metro Line 3 (Nhon-Ha Dong) is nearing completion, while Line 2 (Nam Thang Long-Tran Hung Dao) and Line 5 (Van Cao-Hoa Lac) have been under construction since 2025.

Once operational, these metro lines will shorten travel times and improve the reliability and predictability of urban transport. These factors are key to increasing the attractiveness of areas around metro stations, creating favorable conditions for residential, commercial, and service developments.

In the long term, the metro will not only improve connectivity but also support the formation of new urban centers, helping to ease pressure on the existing urban core. This shift plays an important role in restructuring urban space and supporting sustainable development goals, and according to Matthew Powell, director of Savills Hanoi, in the upcoming 5 to 10 years, TOD is a highly viable model, especially in cities that are investing heavily in urban railway systems.

Planning orientations towards 2045 show that Hanoi is gradually implementing a strategy to reduce population pressure in the urban core, while developing satellite areas based on the TOD model linked to metro lines and strategic ring roads, aiming to restructure urban space in a more sustainable direction.

Lessons from developed countries

Experience from developed countries such as Japan, South Korea, and Singapore shows that successful TOD consider several core factors.

First, a highly reliable public transport system, particularly urban railways with stable service frequency, punctual operations, and effective connections with other transport modes. Next, integrated planning plays a central role, where transport, housing, commercial space, employment, and public areas are happening in a coordinated manner or within walking distance of stations.

Appropriate density and land-use structure are also decisive, allowing for mixed-use development while maintaining quality of life. Alongside this is a clear policy framework and financial mechanisms, especially the ability to capture land value gains around stations to reinvest in infrastructure.

Finally, TOD can only be truly effective when public behaviour changes, with public transport becoming a more convenient, affordable, and reliable option than private vehicles.

From an investment perspective, as major cities accelerate spending on public transport infrastructure, TOD is increasingly viewed as a driver of sustainable real estate value growth. Market evidence shows that projects located within a radius of around 500 m from metro stations often record significantly higher price growth, in some cases, up to 40% within a short period after the infrastructure becomes operational.

The value of TOD does not emerge instantly, but increases gradually in line with public investment progress, the stable operation of metro systems, and the development of urban ecosystems around stations.

This “in-progress” infrastructure phase that offers opportunities for long-term investors is particularly evident when selecting locations linked to metro lines already under construction, with clearly defined stations or depots, and projects planned as mixed-use developments with integrated amenities.

For such projects, TOD is no longer merely a market buzzword, but an emerging high-value function, contributing to improved quality of life, attracting residents, and laying the next decade of foundation for sustainable growth of Vietnamese cities.