2022-12-07-莱坊-ESG_and_Vietnam_Corporate_Real_Estate_Q4_2022_7页_699kb

Knight Frank Vietnam: ESG and Vietnam’s Corporate Real Estate

Regulation Review

Vietnam is advancing its ESG commitments towards sustainability, building on existing environmental regulations. The country aims for net zero carbon by 2050 and has several national strategies and action plans promoting green growth and energy efficiency across sectors. Key regulations include the Energy Efficiency Building Code, National Green Growth Strategy, Green Growth Action Plan, and upcoming revisions for Eco-Industrial Parks.

Despite no strict green requirements for office buildings, landlords increasingly factor green accreditations into their developments to meet occupier demands. Vietnam offers accreditations ranging from local LOTUS to international standards such as LEED and Green Mark, which are gaining traction in the market.

Green Leases and Accreditations

• Green leases are emerging as tools to enhance building performance and align with ESG criteria.
• Green loans are becoming available, supporting sustainability initiatives.
• Grade A office buildings favor LEED and Green Mark certifications due to their prestige and ease of attainment.
• Green buildings offer cost savings in energy and water usage, leading to rental premiums—in Vietnam’s Ho Chi Minh City CBD, green buildings commanded up to 16% higher rent by Q3 2022.

Social Criteria

• Post-COVID-19, focus has shifted to improving employee health and wellness through features like advanced air filtration, natural lighting, and green spaces.
• WELL Building Standard is gaining attention for enhancing occupant health and productivity.

Governance

• Green loans are available since 2020, supporting sustainability in projects like Etown 6.
• Governance emphasis includes governance reporting via green leases and pursuing green certifications for existing and new properties to align with Net Zero Carbon goals.

Case Study: Deutches Haus

• Achieved LEED Platinum, demonstrating energy efficiency, renewable energy use, and high indoor air quality.
• Highlights the benefits of certifications for both tenants and the environment.

Conclusion and Implications for Landlords

• Investing in green buildings has a payback, with buildings repaying additional construction costs within five years and offering higher rental value.
• Landlords need to prioritize sustainable development to meet the expectations of occupiers, particularly large multinational corporations adhering to global ESG standards.
• Early-stage integration of ESG principles ensures long-term asset value and tenant satisfaction.