A critical issue to be addressed in the journey towards a sustainable real estate market is the reduction of the built environment’s carbon footprint, wrote Joseph Low, president of Keppel Land Vietnam.
Keppel is one of the largest foreign real estate investors in Vietnam. We have been operating in Vietnam for over 30 years, during which we have built up a quality portfolio that includes Grade A offices, residential properties, retail malls, integrated townships, and award-winning serviced apartments.
Throughout these 30 years, Keppel has had the privilege of contributing to the growth of its economy, welfare of its people, as well as the city’s skyline.
A critical issue to be addressed in the journey towards a sustainable real estate market is the reduction of the built environment’s carbon footprint. According to the World Green Building Council, the built environment is responsible for 40% of global carbon emissions.
At the COP26, Vietnamese Prime Minister Pham Minh Chinh laid down a challenge for Vietnam to achieve net zero emissions by 2050. As a leading player in the real estate sector, Keppel is fully aligned with the government of Vietnam as we aim to contribute to a greener environment by providing sustainability-related solutions to help our customers and communities reduce their carbon footprints.
The Estella, a residential project that Keppel completed in 2012, was the first in Vietnam to be conferred with the Building and Construction Authority's (BCA) Green Mark “Gold Award”.
Now, Keppel is pioneering a Sustainable Urban Renewal, or SUR, initiative with a mission to retrofit, future-proof and extend the lifespan of older commercial buildings, including in Vietnam.
Unlike a new building which can be designed with new energy-efficient technologies from the onset, it is much more difficult to implement such technologies for an existing operating building. But in Singapore, we successfully retrofitted Keppel Bay Tower, a 20-year building to become the first commercial development to utilize renewable energy to power all its operations. We were also the first commercial building in Singapore to receive the BCA Green Mark Platinum Zero Energy Award.
For new commercial buildings, we are also able to future-proof it from the onset by using innovative and green design features. A project that showcases this is Keppel’s latest commercial tower in Singapore, Keppel South Central.
A series of passive design analysis and simulations such as sun shading, wind-driven rain, daylighting analysis was conducted to optimise the building façade design and the building’s energy consumption rate. These effectively reduce the amount of solar heat gain into the building by 25% from code requirement.
In addition, we incorporated an assembly of photovoltaic (PV) panels spanning about 700 square meters to its roof design, which is expected to generate an energy yield of about 80,000 kWh per annum.
As for the interior building design, we have also combined a suite of innovative solutions to achieve a high efficiency air-conditioning design system and energy efficient lighting system. The total air-conditioning design system is 40% more efficient than code requirements, whereas the LED lightings with motion sensors system is 45% more effective in achieving the lighting power budget than code requirements.
Upon completion, Keppel South Central is expected to achieve an energy savings of about 6.2 million kWh a year, equivalent to the amount of energy required to power more than 1,300 homes in Singapore for one year.
We hope to bring similar innovative green design features to our Saigon Centre Phase 3 development very soon.
For green initiatives to gain greater traction in the real estate industry in Vietnam, it has to be supported by conducive policies and incentives.
In Singapore, grants were introduced to incentivise attainment of green building standards such as the BCA Green Mark, which has encouraged many developers to incorporate these standards into their design and development. The same outcome can potentially be achieved in Vietnam by offering additional development spaces (i.e. GFA) to help defray the higher implementation cost of sustainability-related solutions.
In addition to developing new buildings, it is also important to ensure older buildings remain relevant to the market.
While the existing real estate laws in Vietnam allow for collective sale or redevelopment of older plots after obtaining consensus from a minimum of 75% lot owners, the regulations and requirements governing the process is rather complex. These, along with additional financial compensation required for relocation purpose, result in a challenging environment for developers to undertake such redevelopment projects.
I had earlier discussed how older and under-utilized buildings could be rejuvenated under Keppel’s SUR initiative to create smarter and more modern assets.
The introduction of incentives such as additional development spaces, within old sites, could encourage more developers to undertake the rejuvenation of older buildings.
Ultimately, collective efforts between private and public sectors are needed to enable the government to optimize land-use in prime districts, provide more land plots to meet the market demand, and beautify the cityscape, all at the same time.
The journey towards sustainable development and a robust real estate industry in Vietnam would also require the pent-up market demand arising from rapid urbanization and the expanding middle class in Vietnam to be met.
Currently, the housing supply is constrained by multi-faceted challenges such as liquidity crunch and complex approval process. If left unresolved, these issues would heighten market uncertainties, leading to increased cost of construction and ultimately result in higher housing prices for the Vietnamese.
The government has been trying to streamline and accelerate the approval process. Such efforts must continue at a greater pace, to minimize the gap between the demand and supply of housing needs.
These are the two key areas we see in Vietnam and some suggestions that the government may wish to consider jointly pursuing with real estate industry players, to strike a balance between meeting the nation’s development goals and preserving the environment.
* Excerpt of a presentation by Joseph Low, president of Keppel Land Vietnam, at the “Development potential of Vietnam’s real estate market” conference on Friday in Hanoi.