IDS Equity Holdings: Differentiation by combining Japanese and Vietnamese culture

Pursuing a green and sustainable standard for real estate projects in Vietnam is generally deemed difficult, particularly in the hotel and office segments because it requires big equity capital. Why did IDS choose to take this direction?

Minh Nguyen, deputy CEO of IDS Equity Holdings

IDS Equity Holdings is a distressed investment company, wherein a large portion of our portfolio is made up of commercial developments, from office buildings to hotels and resorts. The number of distressed assets in this category has been escalating amidst the impact of the COVID-19 pandemic on the domestic and global economy.

With the participation of a leading private investment company in Vietnam, Leadvisors Capital Group and other strategic shareholders including listed investment and real estate development corporations in Japan, our focus has always been on value creation through sustainable development.

With regards to our real estate development arm, IDS Equity Holdings looks to acquire real estate projects in need of capital and a development partner to create a portfolio of fixed-income assets (office buildings, hospitality and serviced apartments) under our own development brand that can be tied to the sustainable values our company is pursuing.

In the face of burgeoning demand for Grade A and premium offices, IDS Equity Holdings has the opportunity to become a pioneer in this segment of the market where green and sustainable certification is becoming an important competitive edge.

What does this commitment look like in action?

In their commitments to shareholders, multinational corporations often include sustainable development targets and energy efficiency goals. Therefore, in addition to strict requirements on the technical standards and solid commercial terms, tenants also look for buildings that have been certified by internationally recognised green and sustainable standards.

An office building is not only required to meet criteria on aesthetics and space, it also has to comply with strict standards on energy efficiency in operation. Developers are now frequently faced with strict conditions set by more progressive customers such as those operating in the IT industry who not only have stringent technical requirements but also tend to be more aware of their environmental footprint.

Investing in quality materials and energy-saving equipment to meet the EDGE certification standard by the International Finance Corporation (part of the World Bank) would provide the foundation to attract more tenants, as well as improving the branding of the “green” commercial real estate chain Leadvisors Premium Offices of IDS Equity Holdings.

The Leadvisors Tower, a flagship development of IDS Equity Holdings, has received EDGE certificate from IFC

In addition to awarding the EDGE certificate to Leadvisors Tower – our flagship development in the west of Hanoi – the IFC has also officially granted EDGE certificate to other IDS commercial real estate projects, such as the Grade A office building Leadvisors Place in the heart of the capital at 41A Ly Thai To and the 5-star Dusit Tu Hoa Palace Hanoi which is currently under construction in West Lake.

At the same time, the IFC has also recognised IDS Equity Holdings as EDGE Champion for our commitment to put all of our developments in the next five years through EDGE certification.

IDS Equity Holdings is building a portfolio of green commercial real estate projects under its own brand. Besides green standards, what other factors does IDS target throughout development?

In each project, in addition to green standards, we have several other strict requirements that aim to maximise comfort and benefits for our tenants.

One of our anchor tenants is HCL Technologies, a global IT corporation listed on the New York Stock Exchange with revenue of more than $12 billion. When choosing Leadvisors Tower as their headquarter in Vietnam, HCL required very strict conditions for the building such as having two high-capacity power sources independently connected to the leased area, as well as separately designed and constructed telecommunications and earthing systems. These requirements are part of the commitments HCL made to its multinational partners and are non-negotiable in any case.

We are pleased that IDS has taken into account these and other potential requirements by tenants when designing the building. Without such foresight, it would have been extremely costly to accommodate these requirements and it would be very difficult to gain the approval of these demanding tenants.

In addition, we also aim to create an interactive space in each building. IDS defines a modern office space as one that is not only aesthetically pleasing but is also comfortable and efficient. In each building, IDS invests in smart systems that allow tenants to supervise and optimise the power consumption of key equipment.

How do you see development trends for commercial real estate in Vietnam?

From our perspective, the commercial real estate market is an attractive playing field for investors that utilise a high equity to debt ratio, especially as Vietnam’s economy is expanding at a rapid pace.

The premium office segment (Grade S and Grade A offices) still has a lot of room for development. As for IDS, we are eager to be in this competitive field and optimistic that the fixed-income asset segment will gradually turn IDS into one of the leading landlords in Vietnam.