URBAN TRANSPORT

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Population density in Ha Noi is 32% higher than in HCMC, where a one-way commute takes approximately 30 minutes, making it the least inefficient among its ASEAN peers. A Hanoi commute is worse, taking 45 minutes equiva-lent to Shanghai but better than Jakarta and Bangkok.

Chart 1: Land dedicated to transport

Spotlight | Urban Transport

02

1. TRAFFIC

Chart 2: Traffic inefficiency

trong economic growth and continued urbanisation since the mid-1990s has accelerated demand for roads in HCMC and Hanoi. Present allocations are under 9 percent of the urban area

that is similar to Jakarta and Bangkok, but far lower than Shanghai, Singapore, Seoul and Tokyo. Without mass public transport then road area allocation is a concern.

0

5,000

10,000

15,000

20,000

Jakarta Taipei Bangkok HCMC Ha Noi Shanghai Singapore Seoul Tokyo0%

5%

10%

15%

20%Road area (% build-up area)-LHS Population density (pp/km2)-RHS

050100150200250300350400

0

10

20

30

40

50

60

One-way traffic time (minutes)-LHS Traffic inefficiency index-RHS

Source: Numbeo.com, 2016

Source: Huynh & Jose, 2016; Demographia, 2016HCMC & Ha NoiRoad allocation

9% <

03

2017

2. MOTORIZATION

Chart 3: Passenger car sales

Chart 4: Car ownership and parking code

Source: VAMA, 2016

Source: ADB, 2011

0

50,000

100,000

150,000

200,000

2008 2009 2010 2011 2012 2013 2014 2015 2016

he motorcycle is easily the most dominant means of transport in Vietnam, averaging one per two people. Motorcycles create less congestion than cars, however due to decreased import duties within ASEAN and increased incomes, car ownership is becoming more common. In the past five years, car

sales grew 35% pa and are expected to triple by 2025.

Bangkok

BeijingDhaka

Guangzhou

HanoiHCMC

HongkongJakarta

KLManila

Seoul

Singapore

Teipei

Tokyo

0

1

2

100 200 300 400

Park

ing

requ

irem

ent i

n re

side

ntia

l bui

ldin

gs

(slo

ts/1

00m

2 )

Car ownership (per 1,000 pp)

>> PARKING SPACEMOTORCYCLES OCCUPY ROAD

Car

Despite a relatively low income per capita, parking fees in the centres of HCMC and Ha Noi are approach-ing those of Singapore, Seoul and Shanghai, while higher than Jakarta, Manila and Bangkok. There is presently an undersupply. Vietnam parking construction code is higher than regional developed countries but lower than developing counterparts.Both HCMC and Ha Noi are currently among the upper-left cities (Chart 5), with expensive office space but

inexpensive parking.

Spotlight | Urban Transport

04

3. PARKING

Chart 5: Office and parking rent

Chart 6: Office and parking rent

Source: Savills Research & Consultancy

Source: ADB (2011) and Savills Research & Consultancy

JakartaBangalore

Johannesburg

LimaDallas

Mexico City

The HagueDenvesMontreal

BeijingAthens

Las vegasVancouver

HonoluluHamburg

ChicagoVienna Copenhagen

MiamiShanghai

Calgary

DelhiSingapore

Washington DCToronto

MunichZurich

Sydney

Amsterdam

MumbaiAbu Dhabi

DubaiParis

Milan New York Midtown

Moscow

Tokyo

London City

London West End

Hong Kong

HCMC

Ha Noi

0

20

40

60

80

100

120

140

10 20 30 40 50 60

Prim

e of

fice

rent

per

mon

th p

er m

2 ($)

CBD Parking price per month per m2 ($)

0

200

400

600

800

05

2017

4. PUBLIC TRANSPORT

Chart 8: Public transport mode

CMC (2%) and Ha Noi (10%) have the lowest regional public transportation shares and are also emerging cities without mass transport rail.

Bangkok was similar the 1990s, plagued by routine congestion, a downtown travelling speed of 10km/h and worsening air pollution. The first metro line was completed by Public-Private Partnership (PPP) in 1999 but suffered from low initial ridership. However, patronage increased from 25%, to 60% by 2010 and to 100% by 2015.

From 2011-2015, Government capital accounted for 55% of transportation infrastructure investment, while from 2016-2020, Government capital will account for just 20 percent. As the Government’s budget tightens, Build-Transfer (BT) projects with land will become more common.

Note: * expected by 2020Source: Ely, 2012; and adapted from various sources

Chart 7: Investment in transportation

Source: Ely, 2012; and adapted from various sources

0

200

400

600

800

1,000

2011-2015 2016-2020

PPP

Public

BOT BT

Public transport mode

HCMC (2%)Ha Noi (10%)

lowest regional

& 0

10

20

30

40

Jakarta* Taipei Bangkok HCMC* Ha Noi* Shanghai Singapore Seoul Tokyo0%

20%

40%

60%

80%Puclic transportation share (%)-LHS Rail (km/mill pp)-RHS

HOANKIEM

LONG BIEN

DONG ANH

GIA LAM

BA DINH

HOANG MAI

THANH TRI

DONG DA

THANH XUAN

HAI BA TRUNG

CAU GIAY

TU LIEM

HA DONG

HOAI DUC

QUOC OAI

Chương Mỹ

DAN PHUONG

ME LINH

TAY HO

1

1

2

2

2

4

4

3

3

8

8

7 6

6

5

2A

2A

Spotlight | Urban Transport

06

oth cities have ambitious transport infrastructure programs. HCMC has planned 5 elevated roads of approxi-mately 71km and 5 metro lines of 106km, with the total expected investment exceeding US$20 billion. Similarly, Ha Noi has planned 8 metro lines of 260km and 6 elevated roads.Transit-oriented development (TOD) advocates property development along mass transit, especially urban railways. It is focused within a half-mile or walking distance of transit stations and typically comprises both

commercial and residential, including housing, office, retail and parking. A critical benefit is that infrastructure can be planned and built along the network, significantly reducing its cost.

5. TRANSIT- ORIENTEDDEVELOPMENT

Traffic congestion point

Metro line

HA NOI

1

D12

THU DUC

D2

D1D3

D10

D11

D6

D8

D5

D4

D7

TAN BINH

TAN PHU

NHA BE

BINH THANH

Ben ThanhMarket

Binh TrieuBridge

SaigonBridge

Phu MyBridge

LONG AN

BINH DUONG

GO VAP

BINH TAN

BINH CHANH

Thu ThiemTunnel

PHUNHUAN

1

3

4

2

6

5

07

2017

Traffic congestion point

Elevated Road

Metro line

HO CHI MINH CITY

1

The first metro line is to be fully operational by 2020 and expected to shift development focus. Living further from the city will become more appealing and cost effective and shift the focus of investors away from the centre. Properties near transit hubs can have significant capital appreciation: 10% in China and Thailand, and 32% in Hong Kong. The same pattern will arise in Viet Nam.

This report is for general informative purposes only. It may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without prior consent. Whilst every effort has been made to ensure its accuracy, Savills accepts no liability whatsoever for any direct or consequential loss arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form is prohibited without written permission from Savills Research.

Disclaimer:

Please contact us for further information :

Troy GriffithsDeputy Managing DirectorTel: +84 (0) 933 276 663Email: TGriffiths@savills.com.vn

Do Thu HangHead of Research - Ha NoiTel: +84 (0) 912 000 530Email: DThuHang@savills.com.vn

Pham Van DaiHead of Research - HCMCTel: +84 (0) 933 276 663Email: PVanDai@savills.com.vn