The ultimate goal of TOD is not to create a wave of land price increases around stations, but to enhance accessibility, land use efficiency, and urban productivity. This insight was shared by Ms. Le Hoang Lan Nhu Ngoc, Senior Director, Head of Strategic Consulting at Cushman & Wakefield Vietnam, during a recent media interview.
1. From an investor’s perspective, how does the TOD element currently factor into the location selection process for project development in Ho Chi Minh City?
Following the commencement of operations for Metro Line 1 in Ho Chi Minh City, we observed clear benefits for projects along the corridor: property prices rose rapidly, liquidity improved, and shopping malls experienced higher foot traffic, leading to better occupancy rates. This has contributed to a shift in how investors evaluate project development locations.
While investment decisions were previously based primarily on physical geographic location, accessibility and travel time are now increasingly prioritized. In other words, distance is no longer measured solely by kilometers, but by the number of minutes required to reach employment, commercial, and service hubs.
In the context of increasingly scarce central land bank and rising costs of personal vehicle ownership, convenient access and travel time to high-quality public transit systems, as the metro line become a distinct competitive advantage. Consequently, TOD (Transit-Oriented Development) is evolving from a mere "nice-to-have" criterion into a strategic imperative during the evaluation of investment opportunities in Ho Chi Minh City, driven by its potential for long-term asset value appreciation.
2. According to Cushman & Wakefield, which real estate asset classes will benefit the most as Ho Chi Minh City's metro network expands: office, retail, residential, or mixed-use developments?
According to Cushman & Wakefield, as Ho Chi Minh City's metro network expands, all real estate asset classes will benefit, in the following order:
- Retail benefits earliest from foot traffic, particularly at interchange, central, and terminal stations. This enhances the fall of the footfall and attracts more retail brands to open stores near stations, thereby raising project occupancy rates.
- Residential properties will experience increased demand from both owner-occupiers and renters. They benefit from reduced commute times, particularly among young professionals, young families, and urban workers who prefer living further from the center to enjoy green spaces and comprehensive amenities while maintaining seamless connectivity to central business district offices.
- Office properties can also benefit and improve occupancy rates, though under stricter conditions. A single metro station is insufficient to form a new office cluster if the area lacks an established business ecosystem, supporting services, and a strong workforce pool. Thus, office properties will benefit most visibly at major transit interchanges with existing local economic activity, or within planned TOD zones designated as new employment hubs.
- Hospitality will record higher occupancy rates as tourists enjoy easier access to accommodation while maintaining predictable travel schedules to city center attractions.
However, over the long term, the greatest beneficiaries will be mixed-use developments that integrate residential, office, retail, service, and public amenities within walking distance of stations. The synergy among these functions helps maintain continuous foot traffic throughout different times of the day, maximizes land use efficiency, and fosters sustainable vitality for the entire area.
3. In the international cities monitored by Cushman & Wakefield, how has TOD reshaped Central Business Districts (CBDs)? Is Ho Chi Minh City seeing a similar trend?
In cities such as Tokyo, Hong Kong, Singapore, and Seoul, metro systems have facilitated a "polycentric" urban model with multiple satellite business centers along public transit corridors, replacing complete reliance on a single traditional "monocentric" core. Under this structure, the traditional CBD retains its role as a financial, administrative, and high-end services hub, while a portion of office, retail, residential, and entertainment demand shifts toward new urban clusters with superior public transit connectivity. This relieves pressure on the central core while generating new economic growth poles. This trend becomes more pronounced in areas possessing three conditions simultaneously: a land bank large enough for redevelopment, strong intermodal connectivity, and sufficiently diverse land-use planning to attract residents, businesses, and visitors alike.
Ho Chi Minh City is in the early stages of this transformation. While the central area of District 1 continues to play the primary role, areas along Metro Line 1, such as Thao Dien, An Phu, the High-Tech Park, and the Vietnam National University area, hold strong potential to develop into new employment, commercial, and service hubs.
However, potential can only translate into reality when these areas successfully attract both residents and businesses while fostering a sufficiently diverse economic ecosystem. Therefore, TOD should not be viewed merely as a tool for residential development around stations but should be oriented toward creating new centers of economic activity equipped with synchronized employment, services, amenities, and public spaces.
4. In your view, what are the most critical conditions for a TOD area to attract businesses, jobs, and new economic activities, rather than simply inflating real estate values?
First, land-use planning must be sufficiently diverse. A TOD area consisting solely of residential apartments will struggle to generate jobs and sustainable economic activity. There must be a balanced mix of residential, office, retail, hotel, healthcare, education, public service, green space, and community amenities.
Second, walkability must be genuine. TOD is not merely about being "near the metro"; residents must be able to walk safely, conveniently, and pleasantly from stations to residences, workplaces, shops, schools, and public spaces. If passengers alight from the metro but remain dependent on motorbikes or cars for the last mile, the model's efficiency will be significantly compromised.
Third, the area requires sufficient development density that is well-controlled. High density generates user traffic, service demand, and commercial viability, but it must be matched by proportionate technical infrastructure, social infrastructure, public space, and operational management capability. Simply increasing floor area ratios without elevating urban quality risks adding pressure rather than solving existing issues.
Fourth, transparent land development and redevelopment mechanisms are necessary. TOD areas typically involve multiple landowners, complex existing residential patterns, and a need for urban spatial restructuring. Without clear mechanisms for compensation, public-private partnerships, and land value capture sharing, investors will find it difficult to make long-term commitments.
Finally, each TOD area must be positioned around a suitable economic function. Businesses do not select locations solely because of metro access, but based on talent and customer reach, operating costs, infrastructure quality, service ecosystems, and commercial profile. Depending on local advantages, TODs can be targeted as financial, tech, educational, medical, retail, urban logistics, or tourism hubs.
When these conditions are met concurrently, TOD can transcend property price appreciation to become a true catalyst for attracting businesses, creating jobs, and driving local economic growth.
5. If Cushman & Wakefield could choose only one metric to evaluate the success of a TOD area after 10 years, which metric would you select and why?
If restricted to a single metric to evaluate the success of a TOD area after 10 years, Cushman & Wakefield would choose residential and employment density.
Compared to real estate prices, this indicator reflects the actual operational vitality of the area far more accurately. Land prices can increase due to expectations, speculation, or supply scarcity, but that alone does not equate to a successful TOD.
When residents choose to live, businesses actively establish offices, retail shops, or service facilities, and workers regularly commute to the area via public transit, it demonstrates that the location has truly become an active economic center. The area then offers not only higher asset value, but also sustained flows of people, employment, capital, and service demand.
In other words, the ultimate goal of TOD is not to inflate land prices, but to enhance accessibility, land use efficiency, and urban productivity.
6. What is currently the most common misconception about TOD in Vietnam?
The most common misconception is equating TOD with simply developing real estate projects near metro stations.
Being "near the metro" is merely a baseline condition. True TOD is an integrated urban development model built around public transit, where the station serves as the central nucleus organizing living, working, commercial, service, and community activities.
A project located near a station that lacks pedestrian connectivity, feeder transport, mixed-use functionality, public amenities, and appropriate density cannot be considered a true TOD. If a development focuses solely on constructing and selling real estate units, it is primarily transit-adjacent infrastructure value capture.
When properly executed, TOD can help Ho Chi Minh City establish new growth centers, alleviate pressure on the existing core, improve housing accessibility, and elevate urban competitiveness. Conversely, if planning lacks synchronization, TOD risks triggering a wave of speculative land price increases around stations without delivering proportionate improvements in living quality or local economic value.