Vietnam investors’ best choice in Southeast Asia: SoilBuild exec

Vietnam is not just one of the first Southeast Asia choices of investors alongside Malaysia, Thailand and Indonesia, but the best, said Ben Ding Khoon Yew, general director of Soilbuild International in Vietnam.

SoilBuild is an integrated real estate and construction company that has already run for 47 years in Singapore and established presences in Myanmar, the UK and Australia, with a portfolio of industrial, commercial and residential buildings. It entered Vietnam in May 2024.

You have entered Vietnam at a time the real estate market is struggling. How come?

Vietnam has actually gone through industrialization for many years since the Doi moi (reform) policy was adopted. Over the years, I think Vietnam has progressed a lot in terms of market competitiveness in Southeast Asia.

Vietnam is actually one of the first choices of investors, along with Malaysia, Thailand and Indonesia. But we see that out of these few countries, Vietnam stands out as the best for several reasons.

Firstly, there's very high political stability. Secondly, in terms of strategic location, Vietnam is situated in the south of China, which is another manufacturing powerhouse and there's a lot of synergy in terms of collaborations upstream and downstream of manufacturing.

Thirdly, Vietnam has a very young population, which is highly sought by manufacturers. Fourthly, Vietnamese labor is very hardworking. I have actually stayed in Vietnam for almost 20 years and have seen this for myself. They also want to learn.

Now, compared to almost 25 years ago, when I’d just came to Vietnam, there has been tremendous improvement in terms of quality and productivity. These are the reasons why nobody can afford to miss out on Vietnam in terms of manufacturing.

Within Vietnam, Soilbuild has chosen Bac Ninh, Hung Yen, and Nghe An provinces as its first destinations. Can you explain?

Nghe An is emerging as Vietnam’s next manufacturing hub, attracting major companies like Foxconn, Goertex and Sunny. This province’s advantages include a strategic location, efficient logistics, an abundant workforce, favorable tax incentives, and an efficient and business-friendly local government.

Meanwhile, Bac Ninh and Hung Yen are already known as the most vibrant industrial hubs in Vietnam’s real estate market because of their strategic location, manufacturing eco-system, excellent infrastructure, proximity to airports and seaports, human resource talents, and sophisticated local governance.

What opportunities and challenges do you see in Vietnam’s industrial property market amidst restructuring of the global supply chain?

Vietnam's industrial property market is experiencing significant growth and transformation, driven by global supply chain restructuring. This shift presents various opportunities and challenges in terms of competition.

The country can capture the wave of increased FDI from the relocation and decentralization of manufacturing and logistics supply chains. This has created a vast opportunity for industrial real estate developers to provide land, industrial, and logistical space. There is a need for smart and green industrial space or land for manufacturers to optimize costs and leverage smart technologies.

In tandem with industrial growth, transport and utilities infrastructure supporting the industries must be built to cope with the increasing demand. This presents a good opportunity for infrastructure and utilities developers.

Moreover, decentralization and cost optimization will push manufacturers to second or even third tier provinces and lend investment attractiveness to provinces like Nghe An, where Soilbuild has invested.

However, Vietnam’s industrial property market is also facing challenges. Vietnam faces competition from other Southeast Asian countries like Thailand, Indonesia, and Malaysia, which are also vying for foreign investment and have their own incentives and advantages.

In prime industrial zones, land prices are rising due to high demand, making it challenging for new projects to secure affordable land. The labor supply, especially in the key economic zone area, poses a strong challenge to attracting manufacturers. Occasions of power rationing and traffic congestion pose challenges to attracting manufacturers.

Amidst the challenging economic environment and rising interest rates, many industrial developers have accelerated the adoption of technologies such as artificial intelligence (AI), automation and robots to reduce operation costs. Do you think industrial property developers in Vietnam have used these advances effectively?

Industrial property developers in Vietnam are increasingly adopting AI, automation, and robotics to enhance efficiency and reduce operational costs amidst economic challenges. While the adoption of these technologies is still evolving, several developers have made significant strides in integrating advanced technologies into their operations. These efforts not only help in cost reduction but also position Vietnam as a competitive destination for global manufacturing and industrial activities.

Coming from Singapore, we have benefited from the adoption of advanced technologies. Through the years, we have been pushing the boundaries of our sustainability journey to not only reduce overall energy consumption and emissions, but also secure a more sustainable future and resilient urban landscape for future generations. We are committed to promoting sustainable development in Vietnam.

Do you have any plans to expand to other countries surrounding Vietnam or to South Asia?

SoilBuild is a Singaporean company, our presence is in Singapore. In addition to Vietnam in Southeast Asia, we also have a presence in Myanmar. Now our focus remains on Vietnam due to the political situation in Myanmar. At this juncture, we have no intention to expand to another Southeast Asian country, at least for the next two to three years.

We still see very good potential here, and we want to focus on Vietnam.

SoilBuild is involved in many types of construction. What is your focus in Vietnam?

In Vietnam, our focus is on industrial buildings. We will build facilities like a factory, a ready-built factory or customized factory. We also build warehouses. At the same time, we can do residential buildings in Vietnam if the opportunity arises. We have extensive experience with residential buildings in Singapore.

Please tell us about Soilbuild Group’s sustainability journey and how you intend to continue that in Vietnam.

Soilbuild is an integrated real estate and construction company established 47 years ago in Singapore with presence in Vietnam, Myanmar, the UK and Australia. Our portfolio includes industrial, commercial and residential buildings.

Our approach to integrating ESG policies into building design emphasizes multiplying the green to ensure that sustainability is embedded at every stage of the asset's life cycle - from design to construction, O&M and occupiers' operations.

Soilbuild is an early adopter of sustainability. Our journey started in 2010, before sustainability became a key theme in Asia.

Solaris@One North, a business hub in Singapore, achieved the then highest sustainability standards of Green Mark Platinum in Singapore. Key features included using natural lights and ventilation, building green belts and shields, water harvesting, etc.

Numerous buildings of ours have achieved various standards of Green Mark and LEED Platinum status since then. With the progression of technologies, our latest Green Mark Platinum building, the TSX in Singapore, has integrated several environmentally-friendly technologies into the design, such as wind simulation to optimize ventilation, sensors, a lift destination control system, a new generation BMS, etc. We obtained a green loan for the building.

As we continue our sustainability journey, we are pushing to reach even greater heights with our next building in Tampines, Singapore to obtain the Green Mark Platinum SLE (Super Low Energy) recognition, which requires more than 60% energy savings. Our ultimate goal will be net zero (NE) and positive energy (PE) buildings.

Sustainability is not an option for the development of Soilbuild International’s buildings in Vietnam. It is mandatory for us. Our first project of a ready built factory in Nghe An will be built to LEED certification standards, continuing our sustainability journey from Singapore.

We remain steadfast in the commitment to our sustainability journey, striving to balance economic growth with environmental and social responsibility. By integrating sustainable practices into every aspect of its operations, Soilbuild aims to build a greener, healthier and more sustainable future for all.