Report reveals mobility gap in local cities

Vietnamese cities are said to miss two of the three elements that would help improve their standing, including shared mobility services and metro systems.

Many have discussed their insights to the mobility situation of major cities such as Hanoi and Ho Chi Minh City (HCMC), asserting that local cities must take a long way to catch up with the top 30 global tech cities featured in the Savills report.

Do Thi Thu Hang, associate director and head of Research Savills Hanoi, said that Vietnamese cities are missing two of the three elements that would help improve their standing, including shared mobility services and metro systems.

There still remains room for improvement in the quality of urban infrastructure in both Hanoi and HCM City. Hang cited research from Savills titled “Urban Transport” in 2017 which noted that the then road area of Hanoi and HCMC only accounted for below 9 per cent of their urban area.

The rate is much lower than Shanghai, Seoul, Singapore and Tokyo, all of which were listed in the Savills 30 tech cities rankings, where road allocation was above 12 per cent.

“Air pollution has also been a concerning issue for the two big cities,” Hang said.

Featuring an in-depth sight on urban mobility, Bui Trung Kien, associate director and head of commercial leasing from Savills Hanoi, said corporate occupiers are coping with limited urban mobility in Vietnam by looking for locations that offer the best connectivity.

Hanoi’s central business district (CBD) should be considered as the first choice for corporate occupiers, due to heavy traffic, travelling time from the inner city out to the western area of the city increasing to around one hour.

This, combined with factors such as increasing rents and a limited supply of quality office spaces inside the CBD, has drawn tenants to non-CBD locations, Kien analyzed.

Hanoi’s metro developments also prioritize access to the city’s midtown and western area, bringing about connectivity advantages for office buildings in these areas.

Kien said that another factor in occupiers moving out of the CBD is that the largest number of employees, 763,000, reside in the secondary area, followed by the western area with 420,000 employees.

“This movement is reflected in the impressive growth of occupancy rate in the Midtown area, from 40 per cent in 2015 to above 85 per cent in 2018, and consistent occupancy in the western area at above 93 per cent”, he noted.

Meanwhile, Hang expressed her belief that the gap between Vietnam and the top 30 ranked global tech cities indicates there are learning opportunities for local cities.

“Different tech cities could learn from each other, we could also learn from them on how to improve our mobility and urban infrastructure, increase public transport usage, and reduce air pollution.”

This, along with local cities’ advantages like having a wide pool of tech talent, comparatively low real estate costs, a large flow of inbound foreign investment, should help raise the competitiveness of local cities in the tech sector, Hang further said.

The Savills Tech Cities 2019, the third iteration of "Tech Cities", highlights the top 30 global tech cities, including developed metropolises such as New York, San Francisco, London, Beijing, and Shanghai.

For the first time, Savills has measured ‘mobility’ as part of its Tech Cities rankings. With global urbanization rising, a city’s ability to get people from A to B efficiently has become increasingly important.

The cities rated by Savills are among the fastest growing developed cities in the world. Across the 30 tech cities, GDP is forecast to rise by 36 per cent over the course of the next decade, against a rate of 19 per cent across other developed centres.

The real estate service provider considers three elements when assessing mobility. They include the availability, density, and investment put into shared mobility services, such as car, bike and scooter sharing services. Secondly, the scale and level of innovation in the city’s metro system. Finally, the quality of urban infrastructure, the ease of walking, the cities cycle networks, congestion, and air pollution.

Despite not leading in any single category, London was ranked first overall for mobility. The city’s public transport system offers smart ticketing through use of mobile, contactless, and Oyster card, which have been integrated across all transport modes from rail to bus.