Green credentials garner a boost for industrial property

June 24, 2024 | 10:08
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Sustainable real estate development is becoming a core component for investors in industrial property.

Julien Nha Vinh Nguyen, country head of Thai logistics and industrial zone (IZ) developer WHA Vietnam, told VIR last week that the company’s sustainability development priorities were incorporated into its business strategy, in line with the UN’s Sustainable Development Goals and its net-zero target by 2050.

Green credentials garner a boost for industrial property
Smart industrial zone concepts are based on international-standard quality design and infrastructure, photo Le Toan

“In particular, WHA IZs differentiate with the WHA Smart Eco IZ concept based on the international standard quality of design and infrastructure, reliability of utilities, and environmental care, integrating use of Industry 4.0 technologies,” Nguyen said.

Some examples of WHA Smart Eco IZ features in the central province of Nghe An include a unique biological system for its central wastewater treatment facility that does not use chemicals and is environmentally friendly; a centralised control room that can track real time and control environmental parameters such as air and wastewater quality; and energy efficiency measures by use of renewable energy sources such as solar power and LED lighting.

For social criteria, Nghe An WHA IZ has to date attracted over $1.2 billion of foreign investment from high-value industries, including some of the largest electronics manufacturers in the world. It results in significant job creation and higher income levels with skills development.

“Our efforts extend to actively supporting community development through charitable activities and infrastructure projects such as building schools and roads. Furthermore, we provide scholarships to students in schools and universities, ensuring access to quality education,” Nguyen said.

For example, WHA designs flood protection system after exhaustive analysis of historical hydrological data to prevent flood risks to WHA IZ Nghe An as well as nearby villages.

Meanwhile, Truong Khac Nguyen Minh, deputy general director of KCN Vietnam, another IZ developer in Vietnam, said one of the biggest challenges in environmental factors that many industrial developers face is infrastructure, such as outdated waste treatment system.

“Thus, if we want to form eco-industrial areas, industrial real estate investors have to build from the beginning as it is not easy to convert existing parks into eco-industrial ones,” Minh said.

For secondary industrial real estate developers, KCN Vietnam hopes that they can be supported in infrastructure investment costs from government and local authorities, and thereby be able to offer more incentives to investors and business owners.

KCN so far has nine industrial property development projects located in Bac Giang, Bac Ninh, Hai Duong, Haiphong, Dong Nai, and Long An provinces, with total capital of around $300 million.

Sustainability initiatives are becoming increasingly important in Southeast Asia, driven by both tenant demand and government policies.

According to a report on navigating Southeast Asia’s economic growth released last week by Cushman & Wakefield, factors such as green building certification, quality, and sustainability considerations are becoming key decision factors for businesses looking to expand their presence in the region.

“One of the heads of a prominent tech company shared that sustainability is a business imperative, and many companies have made commitments in this regard. But beyond that, occupiers are looking at an entire ecosystem and how well the workplace can enable and enhance employee experience,” said Wong Huey Feng, head of Integrated Portfolio Management at Cushman & Wakefield Southeast Asia.

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