Keppel to explore fresh growth opportunities

Having been present in Vietnam for more than three decades, Keppel is now one of the largest real estate investors in Vietnam. What important milestones have been reached in that time?

Joseph Low, Keppel’s president for Real Estate Division in Vietnam

Keppel’s real estate division entered Vietnam in the early 1990s after the country opened its doors to international investors, and has grown to become one of the largest foreign real estate investors in the country, with more than 20 real estate projects and a total registered investment capital of about $3.5 billion.

The company is well known for its residential developments such as Riviera Point, Estella Heights and Celesta Rise, as well as Grade A commercial developments like Saigon Centre in Ho Chi Minh City.

Throughout the past three decades, Keppel is proud to have contributed to Vietnam’s journey of urbanisation through high-quality and sustainable real estate solutions that enrich people and communities. We are bringing in investors to fund the creation of high-quality projects through our investment platforms and asset portfolios.

A good example is the Keppel Vietnam Fund, which combines capital from Keppel and global institutional investors to co-invest in residential developments and commercial properties as well as mixed-use projects and townships in Vietnam.

To date, the fund and its foreign institutional investor have invested alongside Keppel in six high-quality residential projects in Hanoi and Ho Chi Minh City. When fully leveraged, the fund will potentially have assets under management of approximately $1 billion.

Our deep operating capabilities extend beyond real estate and include infrastructure solutions. In 2023, our infrastructure division introduced an energy-as-a-service solution to Vietnam, with the securing of contracts worth over $70 million.

Our subscription-based solution, which includes energy supply, cooling, decarbonisation, and smart energy management, enables businesses and building owners to enjoy significant energy savings without having to make heavy upfront investments.

As Vietnam accelerates its plans to reach net-zero by 2050, we see good opportunities to offer more of Keppel’s sustainability solutions and services in the country.

Keppel was ranked among the top sustainable development companies in Vietnam at the Corporate Sustainability Awards 2024. How does this accolade reflect the company’s commitment to sustainability?

Keppel was ranked as one of the top companies contributing to Vietnam’s sustainable development at the Top 50 Corporate Sustainability Awards for the third year running. This year, Keppel was also recognised for its achievements in the Outstanding Corporate Social Responsibility (CSR) Activity category.

We are committed to being a responsible corporate citizen, making a positive impact on local communities wherever we operate. Our CSR initiatives focus on areas such as caring for the underprivileged, protecting the environment, and supporting education.

The Living Well initiative is bringing clean water to several localities in Vietnam

One project that we are particularly proud of is our Living Well initiative, which was launched in 2022 in Vietnam to bring clean water to people in drought-affected communities. To date, some 70,000 villagers in Tien Giang, Ben Tre, Ca Mau, and Tra Vinh provinces are benefitting from the water filtration systems provided through our initiative, which leverages Keppel’s expertise in water treatment solutions.

We are looking to expand this initiative so that more communities impacted by climate change can have access to clean water.

Other initiatives include the contribution of 3,000 trees to the Dong Nai Culture and Nature Reserve in support of the national programme to plant one billion trees, and the expansion of Keppel’s “R.I.S.E. to the Challenge” programme to schools to raise awareness on rising sea levels and the need for climate action, among others.

Since 2021, Keppel has contributed over VND13 billion (around $542,000) to communities in Vietnam and clocked nearly 6,500 hours of volunteer service in the country through about 30 CSR initiatives. This has touched the lives of some 83,000 beneficiaries in a total of 10 provinces across Vietnam.

What are the advantages and also challenges in the process of doing business in the Vietnamese market?

Singapore and Vietnam enjoy strong economic ties and bilateral trade continues to grow steadily. As Vietnam continues to undergo rapid urbanisation, future investment flows from Singapore to Vietnam are expected to remain positive, underpinned by economic growth and an expanding middle class, as well as the Vietnam government’s efforts and investments into developing key sectors, infrastructure, and a conducive business environment.

With deep capabilities in infrastructure, real estate, and connectivity, Keppel is well-placed to continue contributing towards Vietnam’s sustainable development and to help attract more capital from global investors through our quality investment platforms and asset portfolios.

In Vietnam, we have had many rewarding partnerships with established players, such as Khang Dien and Phu Long, whose local knowledge, experience, and networks have been useful in addressing challenges that foreign players may face. Correspondingly, Keppel’s suite of quality sustainability solutions, international brand name, and access to third-party funds for co-investments are a good complement to our local partners’ strengths.

We are confident that we can continue to build on these win-win relationships with local partners to turn challenges into opportunities in Vietnam.

What are your recommendations to the Vietnamese government to help local real estate develop sustainably and in a green manner?

In Vietnam’s journey towards sustainable development and the improvement of the real estate sector, addressing and reducing the built environment’s carbon footprint is an imperative. To achieve this requires stronger collaboration between public and private sectors.

In particular, governments play a critical role in encouraging the adoption of sustainable solutions in their countries. In Singapore for instance, the Building and Construction Authority provides grants to developers who meet certain green criteria, and Keppel was able to tap on this for the extensive asset enhancements carried out for our assets such as Keppel Bay Tower.

Perhaps a slightly different approach can be considered in Vietnam. For instance, the government can consider providing additional development spaces or longer tenures to incentivise developers to adopt sustainable solutions and technologies to make buildings more sustainable.

Looking ahead, a sizeable share of real estate development over the next decade is expected to be based on retrofitting and repurposing existing buildings, which are greener, less costly, and faster than new construction, and contribute to the circular economy.

Building on our track record, Keppel is driving a sustainable urban renewal initiative, shifting its focus to rejuvenating existing buildings through asset retrofit and incorporating new technologies and smart solutions that will make them more relevant and efficient. Our pivot from a traditional developer model to such urban renewal will contribute to circularity and reducing embodied carbon from business activities, and this is a solution that we are looking to offer in Vietnam as well.

Saigon Centre, Keppel’s flagship mixed-use development in Vietnam

How does Keppel plan to further expand its presence in the Vietnamese market, as well as contribute to flourishing bilateral ties?

We are excited by the many growth opportunities in Vietnam for sustainability solutions. Keppel is well-placed to bring in global financial investors who can contribute capital to fund the development of more solutions and assets that are also smarter and greener. 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.

Beyond real estate and infrastructure solutions in the areas mentioned earlier, Keppel is also uniquely positioned to provide integrated solutions for data centres from clean energy and asset development to operations and management to support customers’ net-zero ambitions.

Our data centre portfolio has a strong international presence, with over 30 centres across Asia-Pacific and Europe. As demand for data storage increases in Vietnam, we see opportunities for Keppel to offer its integrated data centre solutions to support Vietnam’s fast-growing digital economy.

These are just some of many opportunities that we hope to explore and build on as bilateral relations between Vietnam and Singapore grow from strength to strength.

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 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.

Well-positioned to capture growth opportunities in Vietnam The global operating environment was challenging in 2023, with geopolitical conflicts, slow global growth, high interest rates, and extreme climate events. The Vietnamese economy, including its domestic real estate market, was not immune to these challenges.

Keppel expands energy-as-a-service presence in Vietnam The Singaporean-headquartered Keppel, a global asset manager and operator, has reached an agreement in principle with KDI Holdings to provide Energy-as-a-Service (EaaS) solutions to Libera Nha Trang, a mixed-use development in Nha Trang city, Khanh Hoa province.

Keppel corporates with FiCO Pan-United and Coteccons to explore sustainable concrete solutions Keppel Ltd., FiCO Pan-United Concrete JSC, and Coteccons Construction JSC signed a MoU on May 11 to explore the use of sustainable concrete in Vietnam.