Ho Chi Minh City

METRO LINE

CHANGING THE FACE OF THE PROPERTY MARKET

CBRE Global Research

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HCMC | Metro Lines and its Impacts on the Property Market

CBRE Ltd. 2015

CONTENTS
Executive Summary
Introduction
Background
Master Plan: The Six Metro Lines of HCMC
Master Plan: Metro Line No. 1
Impacts on Property Market

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22
23
24

Positive Impacts
Nuisance Effects
Developer Corner: How to Grab the Opportunities
Line 1 and Property Project Pipeline

Case Study
Bottom Line
References

EXECUTIVE SUMMARY

METRO LINE: CHANGING THE FACE OF THE PROPERTY MARKET

Poor infrastructure and lack of an efficient public

transport system has put brakes on HCMC growth.

2020

The first metro line in HCMC - Metro Line No. 1 - was

kicked-off in 2012 and is scheduled to complete in
2019 with the first train to begin running by 2020. The
introduction of this metro line will see the central
districts of HCMC linked immediately with the east of
the city such as District 2, District 9 and Thu Duc
District.
When the metro line comes into operation, the
premium for land price on sites located within a
ten-minute walk from stations could be up to 10% 20% compared to sites in other areas.
A new cluster of commercial and mixed-use
developments is expected to emerge in the metro
line area.
Suspended developments will be revitalised.

CBRE GLOBAL RESEARCH

This report was prepared by CBRE Vietnam Research Team, which forms part of CBRE Global Researcha network
of preeminent researchers who collaborate to provide real estate market research and econometric forecasting to
real estate.
CBRE Ltd. 2015 Information contained herein, including projections, has been obtained from sources believed
to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or
representation about it. It is your responsibility to confirm independently its accuracy and completeness. This
information is presented exclusively for use by CBRE clients and professionals and all rights to the material are
reserved and cannot be reproduced without prior written permission of CBRE.

HCMC | Metro Line: Changing the Face of the Property Market

CBRE Ltd. 2015

INTRODUCTION
The introduction of metro lines are expected to bring many noticeable
changes to areas around transit stations: land prices surge, real estate
developments boom and retailers and offices relocate.

With the first Metro Line in Ho Chi Minh City

making good construction progress and set to open
in 2020, all of us who live and work in the city are
gearing up for some big and exciting changes. For
those of us in real estate, the game will be changing
even more dramatically.
The introduction of a metro system will bring about
a number of benefits. In particular, it will improve
the ability of the population to access employment,
retail and recreation activities. The experience in
other countries also suggests that one of the most
significant impacts of a metro line project is an

HCMC | Metro Line: Changing the Face of the Property Market

impact on property values. Rail transit development

brings many noticeable changes to areas around
transit stations: land prices surge, real estate
developments boom and retailers and offices
relocate.
Of course, as with any infrastructure project, there
may also be localised negative impacts that reduce
property values for some people. Although the exact
impact of nuisance variables such as noise and
visual obstruction caused by the above-ground
railway has not been extensively reviewed, most
studies show that the benefits of a metro system
outweigh the nuisance effects.
CBRE Ltd. 2015

Information on the impact of metro line systems on

property values is often incomplete and limited to
anecdotal evidence, leaving investors and
developers who have developments in the metro line
area without a firm basis to assess future changes.
This report will review the background and progress
of the metro system in addition to discussing its
possible impact on the HCMC property market with
a focus on the anticipated interaction between
supply and demand along the lines.

BACKGROUND
As private ownership of vehicles increased, at one time
98% of households in HCMC owned motorcycles or
scooters. Use of private vehicles became the most
common means of transport within HCMC which caused
severe congestion during peak hours and negatively
impacted on the environment in the city with high levels
of pollution. The situation is worsening as people switch
from motorcycles to cars as average income levels
improve and economic growth continues.

The other urban rail lines in the master plan

are understood to have secondary priority,
but are intended to be in place by 2025:
Line 5 a northern inner semi-loop line
Line 6 a north-south section in the western
suburbs
Southern Monorail through Districts 7 and
2 along Van Linh Parkway
Northern Monorail feeder service to Line 4

Vietnam has been one of the fastest-growing economies

in Asia in recent years with GDP growth of up to 6.0
percent in 2014 and expected to reach 6.5% in 2015-2016.
Nevertheless, these terrible infrastructure issues in
HCMC have put the brakes on growth. Of these, transport
is among the most pressing causes for concern with
traffic jams and an oversubscribed and insufficient public
transport system making travel a time-consuming grind.

Metro Line No. 1 is the first one to be

kicked-off in 2012 which has 2.6 km
underground and 17.1 km above ground
with total 14 stations. The line starts from
Ben Thanh Central Station, heading to
Saigon Bridge then following Hanoi
Highway before ending at Suoi Tien
Cultural Park.

The government has noted a direct link between poor

public transport and inhibited long-term growth, and
since 2001 has been planning a six-line metro system to
strengthen sustainable urban transport within HCMC.
The introduction of the metro line system will see the
central districts of HCMC linked immediately with the
east, the west and the south of the city such as District 2,
District 9, Thu Duc District and District 7.
The urban rail network comprises six Metro Rail Transit
(MRT) lines with a total length of 109km, as well as two
monorail routes and a tramway.
Four priority MRT lines have been identified, and it is
planned that these will be implemented by 2018-2020
Line 1: Ben Thanh Suoi Tien, 19.7 km
Line 2: An Suong Thu Thiem, 19 km
Line 3: Tan Kien Hiep Binh Phuoc, 28.3 km
Line 4: Ben Cat Bridge Nguyen Van Linh, 24 km

HCMC | Metro Line: Changing the Face of the Property Market

Poor infrastructure
and lack of an
efficient public
transport system
has traditionally
put the brakes on
HCMC growth

Although construction only began on

Saigon Bridge on December 12, 2013, its
progress has been accelerated for the last
fifteen months with many construction
activities on site from Ben Thanh, Ba Son
Station to Hanoi Highway. According to
HCMC Management Authority for Urban
Railways (MAUR), the project is
scheduled to complete in 2019 with the
first trains to begin running by 2020.
As work on HCMC's first metro line
steadily moves along, construction on
Metro Line 2 also broke ground in
January 2015 and is expected to be
operational by 2020.

CBRE Ltd. 2015

Tan Kien Hiep Binh Phuoc

28.3km

Can Giuoc Sai Gon Bridge

22 Stations
26 km
Ben Cat Bridge - Nguyen Van Linh
24 km

Ben Thanh Suoi Tien

14 Stations
19.7 km
An Suong -Thu Thiem
19 km

Ba Queo Phu Lam

7 Stations
6.7km

Highest use
Normal use
Least use
Under construction

THE SIX METRO LINES

OF HCMC
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HCMC | Metro Line: Changing the Face of the Property Market

Signed memorandum
of funding
Under planning

CBRE Ltd. 2015

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Thu Duc
District
Go Vap
District

THE SIX METRO LINES

OF HCMC

District 9

Tan Binh
District

Tan Son Nhat

International Airport

Binh Thanh
District

Tan Phu
District

Phu Nhuan
District

Binh Tan
District

District 2
District 1

District 3

HCMC CBD
District 10

District 5

District 4

District 6
District 8
District 7

Scale

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HCMC | Metro Line: Changing the Face of the Property Market

Binh Chanh District

CBRE Ltd. 2015

2km
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LINE 1 MASTER PLAN

Opening
date

2020

Operating
hours

Number
of Stations

14

Estimated
cost

US$2.49 billion

Average
distance
between
two station

City-Centre
700 - 800 m

Network
length

19.7 km

Expected
daily ridership

Non-CBD
1,000 - 2,000 m

20 (5:00 - 24:00 hrs)

17.1 km aboveground
with 11 terminals
2.6 km underground
with three stations

COMPLETED AND OPERATING IN 2020

186,000

Source: Management Authority for Urban Railways, HCMC Government

PARCEL 3

PARCEL 4

Open for bidding

Construction and
installation of
locomotives

PARCEL 1B

PARCEL 1A

Expect to start in 2015

Construction of Ben
Thanh and Opera
House Stations

1A

1B

Started 7/2014
Construction of Ba
Son Station and
tracks connecting to
the Opera House

PARCEL 2

Started 8/2012
Construction of 17.1
km above ground
track between Ba
Son and Suoi Tien

Expect to start in
2017
Construction of
metro operations
center

Source:
CBRE Research, Q1.2015

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HCMC | Metro Line: Changing the Face of the Property Market

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Impacts
on
Property
Market
Positive Impacts
Nuisance Effects
Developer Corner
Line 1 and Property Project Pipeline

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HCMC | Metro Line: Changing the Face of the Property Market

CBRE Ltd. 2015

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POSITIVE IMPACTS
Higher property values
In theory, a home located near a public mass
transit system should command a higher rent or
sales price than one that is further away because
good public transport allows those living nearby
to more easily travel to and from destinations that
are important to them. One review of the
literature identifies studies in which the premium
for home prices in locations close to public
transport ranges from 6 percent to 45 percent
(Cervero et al. 2004). Another sets the range
between 3 percent and 40 percent (Diaz 1999).
However, the impact of a new public transport
system on housing prices depends on a number
of mediating factors including housing tenure
and type, the extent and reliability of the public
system, the strength of the housing market, the
nature of the surrounding developments and so
on. In a metro area with a strong housing market
and a reliable public transport system that
effectively connects residents with jobs and other
destinations, the price premium may well be
much higher than the average.
So, what have the residential market trends been
over the past three years in HCMC? One might
safely generalize that properties located in metro
line areas including Binh Thanh District, District
2, District 9 and Thu Duc District currently sell at
small to modest premiums, somewhere between

2% and 5%, compared to properties

having similar finishing and level of
facilities but not located in the metro line
area. In the future, when the metro line
comes into operation, the premium for
land price on sites located within a
ten-minute walk from stations could be up
to 10% - 20% compared to sites in other
areas.
Our research found that asking prices of
high-end residential projects in District
2 increased from an average of $1,490 per
square metre in 2012 to $1,650 today, up
11%, compared to just 3% citywide
(Figure 1).
Interestingly, the number of successful
transactions has also gone up. According
to our research, the number of units sold
in District 2 was as low as 329 units in 2012
and is now 3,710 (Figure 2). Although no
concrete conclusion on the impact of
metro line can be drawn from the increase
in selling prices as well as transaction
numbers, it would make sense that
developers have raised their prices in
anticipation of significant demand once
the metro line starts running.

Figure 1. High-end Condominium,

Average Primary Asking Price (US$/sm)
Metro Line No. 1
groundbreaking

Start of Line No. 1 Construction

on Saigon Bridge

$1,800
$1,700
$1,600
$1,500
$1,400
$1,300
$1,200

2011

2012

2013

HCMC

2014

Q1.2015

District 2

Price exclusive of VAT and maintenance fee

Source: CBRE Vietnam, Q1 2015.

Figure 2. Condominium Transactions (No. of Unit Sold)

in District 2, District 9, Thu Duc District
Start of Line No. 1 Construction
on Saigon Bridge

4,000

...asking prices of
high-end residential
projects in District 2
increased from an
average of $1,490 per
square metre in 2012 to
$1,650 as of today...

3,500

Metro Line No. 1

groundbreaking

3,000
2,500
2,000
1,500
1,000
500
0
2011

District 2

2012

2013

District 9

2014

Thu Duc District

Source: CBRE Vietnam, Q1 2015.

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HCMC | Metro Line: Changing the Face of the Property Market

CBRE Ltd. 2015

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POSITIVE IMPACTS
Land-use impact: A new cluster of
commercial and mixed-use developments

Revitalising suspended developments

Better connectivity will allow commercial activities

to be decentralised away from the congested
Commercial Business District (CBD). This will also
allow occupancy costs for the city to be controlled
and managed by being able to offer alternative
locations away from the CBD but yet still being well
connected. It is expected that new clusters of
commercial properties will arise along the metro
lines, especially for mid-end properties.

One of the things that has traditionally held HCMC

back has been its poor infrastructure and lack of an
efficient public transport system. For property
investors, especially foreign ones, anywhere outside
a catchment of half an hour drive from the city
centre doesnt really come into play as a serious
investment opportunity. Commuting times are just
too long and it can be a struggle to get into the city
or to the airport at the best of times. However, the
introduction of Metro Line no. 1 in 2020 will cut
journey times by at least half meaning that
anywhere with decent access to this line will really
benefit.

With 186,000 riders per day expected for the first line
in HCMC, obvious opportunities will be seen in the
retail sector where a retail mall is usually
incorporated in a community to benefit from
commuter traffic. On the other hand, the metro line
will also help in expanding the retail catchment area
by providing vehicle cost savings to remote
shoppers, encouraging them to come to the city
centre for shopping.

0%

Figure 3. Y-o-Y Growth in Condominium Supply by District, HCMC

90
80
%
%

70
%

60
%

50
%

40
%

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Planners like to use the term Transit Oriented

Development (TOD), which means we can expect
mixed-use developments that will include condos,
apartments, offices, hotels, restaurants, shops,
outdoor activities, educational institutions and
cultural and other attractions much as can be seen
today in cities such as Hongkong, Bangkok or
Singapore. The suburban projects that are currently
within this area will likely be transformed or torn
down to make way for such mixed-use
developments.

It is certainly notable that new developments at the

extremities of the metro line are attracting huge
interest. These include the 90-year-old Tax Center
building which was demolished at the end of 2014
and is set to be replaced by a 40-story tower that will
have a direct underground connection to the
adjacent deep metro station; Masteri Thao Dien, a
mixed-use project developed by Thao Dien
Investment JSC in Thao Dien area that will be
connected directly to An Phu Station; Thao Dien
Pearl by SSG Group connected to Thao Dien Station
and Vinhomes Central Parks by VinGroup that sits
close to Tan Cang Station.

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Improved accessibility and shorter travelling times

on the metro will provide a transit option for office
staff from suburban areas and allow them to look at
job opportunities in the CBD, which will serve as a
demand catalyst for the office market.

An analysis from CBRE Research found that the

number of condominium units surged in areas close
to stations in the last three years. The average
growth in supply in District 2 is 36%, compared to
just 24% in District 4 or 10% in District 7. It is
expected that condominium supply in District 2 and
District 9 will surge by 58% and 200% in 2017
respectively (Figure 3).

Similarly, a 10% increase in retail podium GFA is

reported in District 2 in the next three years,
including but not limited to Estella Heights (37,290
sm GFA), Vincom Megamall Thao Dien (120,000 sm
GFA), Thao Dien Pearl (20,400 sm GFA), Lexington
Residence and The Sun Avenue.

20
%

10
0%

2013

2014

District 2
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HCMC | Metro Line: Changing the Face of the Property Market

CBRE Ltd. 2015

2015

District 7

2016

2017

District 9
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DEVELOPER CORNER

HOW TO MAXIMISE POSITIVE IMPACTS OF THE METRO LINE ON

PROPERTY VALUES?
Given that there are proven positive impacts of
metro lines on property values due to the
improved accessibility and the ability to attract
new and more intense developments, how best
can property developers maximize the potential
for a property value increase?

Maximizing accessibility

NUISANCE EFFECTS
Although there is a clear positive correlation between the
metro line and property values, there are still concerns about
possible negative effects including noise, traffic, safety and
aesthetics. Within the immediate area of stations, nuisance
effects such as noise and increased traffic may reduce
potential property value of those properties closest to the
station area. Nevertheless, most studies show that the benefit
of a metro line outweigh the nuisance effects.

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HCMC | Metro Line: Changing the Face of the Property Market

For those properties that are located right

next to an above-ground rail station, it is
advisable to build direct access to the station.
Some developments that are being built on
the same side of the metro line have been
quick to work with the citys railways
authorities to ask for approval to link
properties directly to metro stations such as
the Thao Dien Pearl project connecting to
Thao Dien Station or Tax Center project to
connect with Opera House Station.
For those properties which are further from
stations, it is necessary to improve
pedestrian accessibility from the station to
the project including pedestrian paths, safety
improvements,
lighting,
and
other
pedestrian amenities. For example, a flyover
is planned to build over the Hanoi Highway
to link up residential projects on the other
side with the An Phu Station.

CBRE Ltd. 2015

Early-stage land acquisition

Given that housing prices and land prices will

definitely increase after the metro line system
opens, a proactive locality that implements a land
acquisition strategy before land values increase
will have a much greater dollar-for-dollar impact
than one that reacts after prices have begun to
climb. One option is to acquire land for
mixed-income residential development as part of
the process of acquiring land.

Maximising aesthetics aspect

For mixed-use developments located along metro

line corridors, the additional passenger traffic
from the train represents new demand for retail.
Developers who wish to take advantage of this
demand should pay attention to their building
design: convenience and easy access is critical,
and also leasing: the retail categories offered
should suit the typical purchasing behavior of
commuters or travelers. Also to consider is
visibility: sight-lines from the train and station
exits give people multiple opportunities to see
any retail space before they decide to visit;
therefore the walls, hoardings, lighting and
signage should be visually attractive and oriented
to maximize exposure.

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NEW EASTERN
BUS STATION

University
Village

Metro
Tower

LONG BINH DEPOT

SUOI TIEN

LINE 1 AND
PROJECT
PIPELINE

Suoi Tien Amusement Park

HI-TECH PARK

Saigon Hi-Tech Park

Thu Duc District

Thu Duc Golf Club

THU DUC

The Emerald

Co.op
Mart

TDH Truong Tho

Richland Hill

Hai Au Intresco

First Home
Thu Duc

District 9
Metro Tower

Go Vap
District

BINH THAI

RESIDENTIAL FOR SALE

Green Building
First Home
District 9

Tan Binh
District

PHUOC LONG

XI Riverview
Palace
Tropic
Garden

Binh Thanh
District

Under-construction

Villa Riviera

Planning
Flora Anh Dao

Saigonland
Apartment
Thao Dien
Pearl

Wilton Tower

Phu Nhuan
District

The Ascent

Completed

Gateway
Masteri
Thao Dien Nassim

Pearl Plaza
NEW PORT

City Garden
VAN THANH

Saigon Pearl

RACH CHIEC

Mega Ruby
Mega Residence

Estella Heights
AN PHU

THAO DIEN

The Vista

Cantavil
Premier
Imperia
An Phu

Vinhomes
Central Park

The Eastern

Mega Village

COMMERCIAL
Under-construction
Planning

The Estella
Lexington
Residence
Regency
Park

ParcSpring
The Krista

The Sun Avenue

District 3
District
10
Scale

Nexus

BA SON

Vista Verde

District 2

Ascott Waterfront
Saigon

OPERA HOUSE

Saigon Center

2km

Diamond
Island

Tax Plaza

BEN THANH

The One

District 1
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HCMC | Metro Line: Changing the Face of the Property Market

District 4

CBRE Ltd. 2015

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CASE STUDY

Urban rail transit has long been part of the

development of cities around the world. In
certain parts of Europe and the United
States, the first urban rail transit systems
date from as early as the London
Underground in 1863 or the New York City
Subway in 1904. However, many countries in
the developing world are still relatively new
to the urban rail transit arena. In Asia (with

the exception of Japan), the first underground

metro systems opened in the 1970s. Even
Singapores mass transit system only started
operations in 1987 and Bangkok, Thailand only
opened its first Sky train system in 1999.
Changes in infrastructure including new transport
corridors and metro systems in densely populated
Asian metropolises like Bangkok, Manila, Jakarta

Tyne & Wear Metro, Newcastle, U.K.

(Opened 1980, 74.5 km)

Vienna S-Bahn, Austria

(Opened 1962, 14 km)

Dallas Area Rapid Transit (DART)

(Opened 2002, 144.8 km)

House prices increased 2% within 200

meters of metro stations.

Districts located along S-Bahn

corridor
have
witnessed
increases in numbers of new
housing units of 18.7% over a
ten-year period, as opposed to
4% and 10% in more remote
locations.

The value of property near the

DART lines is 25% higher than
similar real estate elsewhere in
the area.

Retail activity or office developments in

proximity to stations does not appear to
be directly linked to metro lines

Price of property located

within walking distance of the
nearest railway or metro
station increased 7.5% over
other locations.

Between 1985 and 1995, 25%

of new offices, 13% of new
commercial premises and 25%
of new residential dwellings
were built adjacent to the
metro system.

Impact was most significant at

a distance of 500-750 m, as
opposed to adjacent locations,
where values dropped.
In the best locations, dwelling
prices increased by 11%.

Source:
Claudio A. & Gastn P. 2008
Hack J. 2002.

26

and Hong Kong have proved that they can

stimulate and open up parts of a city, attract
investment, stimulate extra demand for housing
and bring a new energy to areas. Given that the
number of residential property owners or
residential renters is greater that the number of
consumers of other types of real estate, the effects
of the metro lines on the property market is most
notable in the residential sector.

For an apartment located within 200

metres of a station, the average price
increase was 7.4% after the
announcement of construction and
5.3% after the unveiling of the basic
engineering project,
For a flat located between 600 and 800
metres away, the average price rise is
5% and 3.8%, respectively.

Nantes, France
(Opened 1985, 43 km)

Helsinki Metro, Finland

(Opened 1982, 21,1 km)

HCMC | Metro Line: Changing the Face of the Property Market

The average price of apartments rose

between 4.1% and 7.9% after
construction was announced and
between 3.9% and 5.4% after the basic
engineering project showing the
location of the stations was unveiled.

CBRE Ltd. 2015

Santiago, Chile, Line 4

(Opened 2005, 23.9 km)
27

CASE STUDY
Figure 4: Distances to LRT1 and residential
land values and correspondence with other
observed effects.

MANILA, PHILIPPINES

20.55%

20

Negative values

9.47%

Negative values

10

Distance

LRT Station
LRT Line

16.06%

15

IMPROVEMENTS
NUISANCE

Land value premium

INDIVIDUAL EFFECT

Positive values

COMBINE EFFECT

6.50%

5%

457
414

0%

Changes in residential
land-value 1993 - 96 (US$/m2)

371
328
285

BTS Skytrain

MRT Blue Line

242

Non-Residential

198

Source: Chuti T. 2011.

155
112
69
26
-17

Residential

BANGKOK, THAILAND
After the Asian Financial Crisis in 1997, the Thai
government focused on building more road and
expressway infrastructure in an attempt to ease
heavy traffic congestion. In 1999, the BTS Skytrain
was first operated with a route covering the central
business district and inner city area. According to
the Bangkok Metropolitan Administration, more
than 500,000 single trips are made daily. The BTS
Skytrain and MRT underground systems are used
daily by residents living near these mass transit
routes to commute to workplaces and avoid heavy
road traffic. The BTS and MRT systems have not
only helped to combat traffic congestion but have
also dramatically lifted the price of real estate
properties, especially condominiums located near
the BTS and MRT stations. Consumers are willing
to pay more for properties which are closer to
these stations because such decision can actually
save commuting time and costs.
A research conducted by Chuti Thamrongsrisook
in 2011 claimed that after the Skytrain system was
built along Bangkoks Sukhumvit Road,
residential and non-residential land parcels were
discounted by between approximately 2,100 baht
(US$68) and 9,700 baht (US$313) per square metre
for every additional kilometer which they were
away from the nearest BTS Skytrain network
station. After completion of the MRT Blue Line
network, residential and non-residential land
parcels declined by between approximately 7,000
baht (US$226) and 16,500 baht (US$532) per
square metre for every additional kilometer which
they were away from the nearest MRT Blue Line
Network station.

3600

3300

3000

2700

2400

2100

1800

1500

1200

-60

900

HCMC | Metro Line: Changing the Face of the Property Market

Distance

NUISANCE

600

28

LRT Station
LRT Line

300

A study by Javier F. Pacheco-Raguz in 2010

indicated that the introduction of LRT1 may have
had two different and opposing effects on
residential land values. First, closer proximity to
the line may increase property values, implying a
declining price gradient on incremental distance
from its stations. Second, it is widely known that
noise, vibration, congestion, visual impact and
increasing commercial activity (among other
factors) may have some negative impacts on
residential land values. Properties adjacent to the
line may experience nuisances that lower their
value, evidenced in the correlations between
distance to the LRT1 line and residential land
values. As shown in Figure 4, the analysis of the
scattergrams of distance to LRT1 and land values
supports these observations. Changes in land
values are negative immediately adjacent to the
line; the negative effect weakens with distance
from the LRT1, until it disappears by the 900 m
range.

IMPROVEMENTS

The Manila Light Rail Transit System Line 1

(LRT1) was the first metro line of the Manila Light
Rail Transit System and was introduced in 1984.
Presently, the line contains twenty stations and
runs on 19.65 kilometers of fully elevated route.

Positive values

25

In the 1970s, transport in Manila was exclusively

road-based, made up of jeepneys (a form of small
public utility vehicle), mini-buses, standard
buses,
taxis,
motorbike
tricycles
and
bike-powered pedicabs. While large buses
operated on arterial or primary roads, jeepneys
served trunk and secondary ways. By feeding
these two modes, motorized tricycles and
pedicabs provided a complementary transport
service, mainly from established terminals near
the most important centres.

Figure 5. Land value premiums by

urban rail transit for every kilometer
closer to BTS Skytrain/MRT Blue Line
station.

Distance to LRT1 (meters to the line)

Source: Javier F. 2010.

CBRE Ltd. 2015

29

BOTTOM LINE:

WHO WILL BENEFIT FROM BEING CLOSE TO METRO STATIONS?

The construction of the first metro line in
HCMC will be a significant event for the city
and will provide important opportunities in
the real estate market.
Proximity to the metro line will be particularly
important for:
Building owners with property in the
500-800 metre zone (or closer) will greatly
benefit. Owners of properties in these
areas will be able to charge a premium to
sale/lease and they will be able to develop
mixed-use buildings with even more
tenants than they currently have. This
includes but not limited to developers of
office buildings, retail malls, serviced
apartments, residential for sale/for lease
and hotel properties.

If you are one of the above beneficiaries and if

you are keen to take advantage of this
significant opportunity, now is the time for
you to seriously take the potential metro line
impacts into consideration. An office tenant
might wish to lock a 5 10 year contract, while
rates are most likely lower than they will be in
five years. A mixed-use developer might wish
to secure a large plot of land in the metro area
to offer the live, work, and play environment
while asking prices are lower than they may
eventually be.
CBRE will continue to monitor property prices
and rental levels in all areas of HCMC which
will allow us to confirm whether actual rises in
areas close to the Metro Line system match
predictions.

Retail businesses that serve transit riders.

Employment centers that attract many
commuters, such as offices, medical
centers and educational facilities.
Recreational and entertainment activities
that attract large crowds.
Finally, residents in the metro line area
will
enjoy
a
new
live-work-play
neighborhood, an influx of more jobs and
new amenities, higher property values for
their homes and less traffic.

REFERENCES

30

HCMC | Metro Line: Changing the Face of the Property Market

Cervero, R. 2004. Effects of light and commuter rail

transit on land prices: Experiences in San Diego
County, Journal of the Transportation Research Forum.

Claudio A. & Gastn P. 2008. The Anticipated

Capitalization Effect of a New Metro Line on Housing
Prices

Diaz, Roderick B. 1999. Impacts of Rail Transit on

Property Values. McLean, VA: Booz Allen & Hamilton,
Inc

Hack,
Jonathan,
Regeneration
and
Spatial
Development: a Review of Research and Current
Practice, IBI Group, Toronto, 2002.

Javier F. Pacheco-Raguz. 2010. Assessing the impacts

of Light Rail Transit on urban land in Manila

Chuti T. 2011. The Influence of Rapid Transit Systems

on Condominium Prices in Bangkok,

CBRE Ltd. 2015

31

For more information about this regional major report, please contact
Research
Dung Duong, MRICS
Head of Vietnam Research
+848 3824 6125
dung.duong@cbre.com

An Nguyen
Associate Director
+844 2220 0220
an.nguyen@cbre.com

Ngoc Le
Senior Manager
+848 3824 6125
ngoc.le@cbre.com

For more information regarding global research and activity, please contact:
Nick Axford, Ph.D.
Global Head of Research
+44 20 7182 2876
nick.axford@cbre.com

Richard Barkham, Ph.D., MRICS

Global Chief Economist
+44 0 20 7182 2665
richard.barkham@cbre.com

Henry Chin, Ph.D.

Head of Research, Asia Pacific
+852 2820 8160
henry.chin@cbre.com.hk

Neil Blake, Ph.D.

Head of Research, EMEA
+44 20 7182 2133
neil.blake@cbre.com

Spencer Levy
Head of Research, Americas
+1 410 951 8443
spencer.levy@cbre.com

Follow Neil on Twitter: @neilblake123

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