Greener industrial facilities are an inevitable trend

A new generation of foreign capital has flowed strongly into Vietnam and a positive signal for the industrial real estate market. How do you see this movement compared to before?

Nguyen Van Tien, vice chairman of the Vietnam Industrial Real Estate Association

Vietnam and Southeast Asian countries are becoming ideal destinations for foreign direct investment, thanks to low costs and strategic locations in the repositioning of manufacturers’ supply chains.

Such investors are becoming more demanding in choosing locations. Factors affecting the choice of location include infrastructure, regional connection, electricity, water and telecommunications.

Tax incentives, financial support, and other incentives from the government play important roles in attracting funding from abroad. Areas with abundant human resources, high skills and competitive labour costs are prioritised by investors.

In addition, in the global movement wave, foreign backers are increasingly interested in high-tech industries, such as electronics manufacturing, IT, and renewable energy. These require industrial parks (IPs) to meet high requirements for infrastructure and human resources.

Investors are also increasingly interested in sustainable development and social responsibility. IPs with a strong commitment to environmental protection and sustainable development are attract more financiers.

Green development is a topic of interest to both localities and investors, and more action plans are being developed to realise green goals. What is your perspective on this trend?

The green development trend in the industrial real estate sector is a positive and necessary change, meeting both the need for environmental protection and the requirements of modern investors. Focusing on green development will bring long-term benefits to the environment, businesses, and communities.

Investors are increasingly interested in criteria of social and environmental responsibility. Green development helps IPs pull in high quality, especially international businesses with high and strict environmental standards.

In addition, using energy and resource saving solutions protects the environment and reduces long-term operating costs for businesses. For example, using renewable energy or smart water management systems can reduce energy and water costs.

Green development not only focuses on economic factors but also focuses on the living environment of workers and surrounding communities. A clean, safe and environmentally friendly working environment will improve the quality of life and work performance of workers.

What factors motivate industrial real estate developers to be greener and more sustainable?

Green development in the industrial real estate sector is and will become a must. This comes from different reasons of economy, society, and legality.

Currently, many countries and regions have issued mandatory regulations on environmental protection, energy saving, and sustainable development. For example, European Union standards on CO2 emissions and waste management are becoming increasingly stringent. Vietnam has also issued many incentive and mandatory policies on green development, such as the Law on Environmental Protection, energy saving programmes and green construction standards.

Meanwhile, consumers are increasingly smarter and more interested in sustainable products and services, thereby putting pressure on businesses to comply with green standards to maintain and expand the market in and out of the country.

Partners, especially international corporations, often require suppliers and partners to comply with social and environmental responsibility standards. This forces businesses to apply green development measures to meet and maintain cooperative relationships.

Enterprises that apply green development measures often have higher reputation and better competitiveness in the market, especially in industries that require high environmental standards. Society is increasingly aware of the importance of environmental protection and sustainable development, putting pressure on businesses and governments to take action.

Green credentials garner a boost for industrial property Sustainable real estate development is becoming a core component for investors in industrial property.

Lower competitiveness affecting Vietnam's industrial parks The competitiveness of industrial parks in Vietnam is currently weak, at the same time as most need to evolve into specialised or green-oriented facilities.

Industrial parks strive to level up Industrial, service, and urban zones with smart technology application in operation and management of technical infrastructure will become hot development trends in the Vietnamese market, especially when it comes to some of the nation’s biggest foreign investors.