Investment opportunities open in Vietnam's green real estate market

November 21, 2023 | 17:44
(0) user say
As Vietnam continues to undergo rapid urbanisation, underpinned by economic growth and an expanding middle class, coupled with the improvement in infrastructure networks, the country continues to offer tremendous opportunities for investors, according to Wong Wai Foo, head of Sustainable Urban Renewal in Vietnam, Keppel Corporation, at the Sustainable Development 2023 conference held by Vietnam Investment Review on November 16.
Investment opportunities open in Vietnam's green real estate market

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.

“As a global asset manager and operator with deep capabilities in infrastructure, real estate, and connectivity, Keppel 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,” said Foo.

“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 to Vietnam.”

A good example is the Keppel Vietnam Fund. This private fund is combining capital from Keppel and global institutional investors to co-invest in residential developments, commercial properties as well as mixed-use projects and townships, especially ones that are smart and sustainable, in Vietnam. To date, the Keppel Vietnam Fund has invested alongside Keppel in five high-quality residential projects in Hanoi and Ho Chi Minh City.

The company is collaborating with Khang Dien to develop two smart and sustainable residential projects in Thu Duc city, Ho Chi Minh City. When completed, the development will set the benchmark of the residential projects landscape as well as contribute to the sustainable urban space in Thu Duc.

In addition, it is also looking to implement sustainable urban renewal technologies at its 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 into 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,” Foo added.

Apart from real estate, Keppel sees promising opportunities in the energy and data centre sectors, given the growing emphasis on green and circular economy in Vietnam.

It is making significant progress in these sectors, notably, with the launch of the Operations Nerve Centre to offer long-term 'Energy-as-a-Service' solutions to many domestic customers.

“This initiative not only delivers exceptional economic value to our customers but also contributes to enhancing community wellbeing and advancing Vietnam’s sustainable development,” Foo added.

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

At Keppel, its 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 new commercial developments, improving the energy efficiency of existing buildings through energy optimisation and digitalisation strategies, maximising on-site renewable energy, and purchasing renewable energy certificates. In addition to those, it is also looking at increasing the use of green-labelled and low-emission materials and products.

One notable project that exemplifies its commitment to green construction is The Estella, a residential development. It was the first project in Vietnam to receive BCA's Green Mark Gold Award in 2012.

Some of the green initiatives at The Estella include solar roof panels, use of low Volatile Organic Compound 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, Keppel increased its 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. Through our sustainable urban renewal 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 contribute to combatting climate change and in building a more sustainable future for the country,” Foo added.

Keppel Land invests $138 million in two residential projects with Khang Dien Keppel Land invests $138 million in two residential projects with Khang Dien

Keppel Corporation Ltd. (Keppel) and Keppel Vietnam Fund (KVF), jointly known as the Keppel Consortium, have entered into binding agreements to acquire a 49 per cent interest in two adjacent residential projects in Thu Duc City from the Khang Dien Group for an aggregate consideration of approximately $138 million.

Keppel Corporation acquires stake in a retail property in Hanoi Keppel Corporation acquires stake in a retail property in Hanoi

Singaporean Keppel Corporation on July 6 announced that Keppel Land Ltd., through its wholly-owned subsidiary, VN Prime Vietnam Co., Ltd., is acquiring a 65 per cent stake in a company ProjectCo, which will hold a retail property in Hanoi.

Keppel expands its energy-as-a-service footprint in Asia Keppel expands its energy-as-a-service footprint in Asia

Keppel Corporation, through its Infrastructure Division, has secured contracts worth over $70 million to provide long-term energy-as-a-service (EaaS) to Republic Holiday Inn, Republic Suite Plaza, and Estella Place in Ho Chi Minh City, as well as Grand Mercure Quang Binh.

Singaporean investors increasingly drawn to Vietnam Singaporean investors increasingly drawn to Vietnam

Thanks to the open economic landscape and enormous growth potential in various sectors, Vietnam has always been on the list of favourable destinations for Singaporean investors, who have consistently been among the leaders in terms of foreign capital inflows into the country.

By Bich Ngoc

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional