Subway and elevated railway systems in Hanoi and Ho Chi Minh City are expected to considerably increase the value of nearby property projects.
Tran Nhu Trung, deputy director of Savills Hanoi, said the ongoing infrastructure projects would help ensure a favourable socio-economic environment, attract investment, establish a new transport culture and alter the behaviour of many urban residents.
A range of underground and sky railway projects are being implemented such as Ben Thanh-Suoi Tien and Ben Thanh-Tham Luong in Ho Chi Minh City, and the Nhon-Cat Linh and Cat Linh-Ha Dong routes in Hanoi.
Trung said future infrastructure development would benefit many property projects.
“Once put into operation, subways, sky trains and express buses will bring a new look to cities. In addition, this transport infrastructure will have obvious impacts on the real estate market, house sales and shopping centres,” Trung said.
According to Savills Vietnam, the country’s development of underground railways could benefit from the experiences of other countries.
Research conducted by Vinchensan and partners in 2009 claimed that after the sky train system was built along Bangkok’s Sukhumvit Road, property market supply was five times greater than pre-construction times and areas without stations during 1992-1999.
Other research using the hedonic price model conducted in Shanghai in 2008 showed that the residential price changed for every 100 metres closer to the subway.
These research and models have illustrated the close relationship between real estate, housing prices and utilities related to transportation.
Transportation options change the appearance of real estate. Professor Phan Van Truong, who participated in research of Metro projects in Bangkok and Singapore, said metros was like a bitter, but efficient medicine for Vietnam’s urban transportation woes.
On one hand, property prices near train stations have been improved. On the other hand, people’s quality of life is improved by easier transport access.
“A railway system will ensure capital recovery from property investment projects. In accordance with history of urbanisation of countries in the world, many of which overcame their difficulties and succeeded in subway and sky train systems,” Truong said.
In Ho Chi Minh City, Thao Dien Pearl condominium complex in District 2 is directly benefited from the first $2 billion metro route of Vietnam because it is directly linked to a station.
“This link plays an important role in increasing the project’s value and competitiveness,” said Le Khac Huynh, deputy director of Ho Chi Minh City Management Authority for Urban Railways.
Huynh said the concept of shopping close to the metro in addition the utilisation of underground space would bring comfort to passengers.
“In addition, trade centres will contribute to profitable investments to offset the cost of a metro. This is a model that many countries around the world, including Japan, have successfully implemented,” Huynh said.
However, any metro system needs to be convenient for passengers for it to be a success.
Nguyen Van Doi, general director of SSG2 Real Estate and Construction Joint Stock Company – the developer of Thao Dien Pearl, said the company had worked with the city’s railways authorities to link the property directly to the Station 6 of the Ben Thanh-Suoi Tien metro route, which started construction in August 2012.
According to Doi, convenient transportation and quick connections would help Thao Dien Pearl residents and business partners quickly go to the downtown area and other nearby public facilities.
Thao Dien Pearl is a complex of apartments and trading centre with investment of $100 million. Expected to be finished in 2013, Thao Dien Pearl will be the first project in Ho Chi Minh City to inherit a perfect infrastructure system linked with metro route and the Saigon bridge 2, the Hanoi Expressway and the Thu Thiem tunnel.
Meanwhile in Hanoi, the $238 million Discovery Complex is the first property project linked directly to the planned elevated railway of Hanoi.
John Gallander, director of Savills Hanoi, told VIR that from his experiences in many other countries, the value of a property complex would be increased when being connected with public transport facilities.
Bich Ngoc
