Vietnam holds tremendous opportunities for property investors: Keppel executive

How do you view investment opportunities in the Vietnamese real estate market over the coming years?

Since entering Vietnam more than three decades ago, Keppel has grown with Vietnam and is today one of the largest foreign real estate investors in the country.

Vietnam’s economy grew 8% in 2022, the highest increase in the last decade, backed by strong domestic retail sales and exports. In the real estate sector, the demand for new launches remained healthy. Reflecting the strong market demand, the first batch of units launched in September 2022 at Keppel’s Celesta Avenue in Ho Chi Minh City was fully booked within a month.

As Vietnam continues to undergo rapid urbanisation, underpinned by economic growth and an expanding middle class, coupled with improved infrastructure networks, we believe that the country continues to offer tremendous opportunities for investors.

As a global asset manager and operator with deep capabilities in infrastructure, real estate, and connectivity, we can bring in global financial investors who will contribute capital to fund the development of more solutions and assets that are also smarter and greener. We will leverage our strong track record in the development and operation of such assets to provide critical infrastructure and services for renewables, clean energy, decarbonisation, sustainable urban renewal, and digital connectivity in Vietnam.

In addition, we are looking to implement SUR (Sustainable Urban Renewal) technologies at our projects and will work with best-in-class local and international partners to incorporate innovative urban solutions such as smart security, smart mobility, and environmental infrastructure solutions in our projects to make them more energy-saving. We believe that sustainable urban renewal is a compelling solution for Vietnam as the country advances on its journey to net zero.

Green construction is an increasing trend in Vietnam. How do you analyze opportunities from green design and construction for new real estate projects in the country?

The Vietnamese government has set ambitious goals and sustainability standards for the construction and real estate industry, including reducing carbon emissions.

At Keppel, our real estate division is undertaking various measures such as phasing out the use of non-essential diesel equipment, achieving high green building standards for all our new commercial developments, improving the energy efficiency of existing buildings through optimization and digitalization strategies, maximizing on-site renewable energy, and purchasing renewable energy certificates. We are also looking at increasing the use of green-labelled and low-emission materials and products.

One notable project that exemplifies our commitment to green construction is The Estella, our residential development. It was the first project in Vietnam to receive BCA's Green Mark Gold Award.

Some of the green initiatives at The Estella include solar roof panels, and the use of low Volatile Organic Compound (VOC) paint and low emission formaldehyde composite wood. The development also features thoughtfully designed elements such as natural ventilation-enabled interiors.

As part of Keppel’s sustainability strategy, we have increased our use of renewable energy. The photovoltaic panels installed on Keppel’s residential and commercial developments in Vietnam have generated an energy yield of nearly 150,000 kWh over the past three years. Celesta Avenue, the newest addition to CELESTA City, will be developed with water-efficient drip irrigation controlled by rain sensors, and solar lighting for the streets.

With many countries and companies making net zero pledges, including Vietnam, we see immense opportunities where Keppel can harness our strong capabilities and experience to help other companies along their decarbonisation journey. As mentioned earlier, through our SUR initiative, we look forward to actively contributing to Vietnam's efforts to achieve net zero by retrofitting older buildings and turning them into energy-efficient ones. Through these efforts, we can contribute to combatting climate change and building a more sustainable future for the country.

What are your recommendations for policymakers to help Vietnam develop sustainably in a green manner?

According to the World Green Building Council, the built environment is responsible for 40% of global carbon emissions. On Vietnam’s journey towards sustainable development and the improvement of the real estate sector, it is imperative that we address and reduce the built environment’s carbon footprint.

To achieve this will require stronger collaboration between public and private sectors. As a leading player in the real estate sector, Keppel is committed to contributing to the reduction of the built environment’s carbon footprint. We aim to contribute to a greener environment by providing sustainability-related solutions to help our customers and communities reduce their carbon footprints.

In this respect, Keppel is driving our SUR initiative. Our SUR model, which is based on retrofitting and revitalising existing buildings, provides a greener, less costly and faster alternative to new construction, and can contribute to the circular economy. By incorporating smart and sustainable features into retrofitted buildings, we can also help building owners to enhance their assets’ performance and value.

Governments also play a critical role in encouraging the adoption of sustainable solutions. In Singapore for instance, the Building and Construction Authority provides grants to developers who meet certain green criteria – we tapped into this for the extensive asset enhancements carried out for assets such as Keppel Bay Tower. Perhaps a slightly different approach should be considered in Vietnam. For instance, the government could consider providing additional development spaces or longer tenures to incentivise developers to adopt cleaner solutions and technologies to make buildings more sustainable.

Further support from the government would help to encourage more real estate investors and developers to incorporate green features in their assets in Vietnam.