Green building goals take gradual steps, Photo: Shutterstock

In July, Refrigeration Electrical Engineering JSC opened the E.town 6 building in Tan Binh district of Ho Chi Minh City after many years of construction. The project has a total rental area of 37,000sq.m, including 16 floors and five basements.

Despite just opening, the company said that more than 30 per cent of the area was already occupied.

The complex has also achieved LEED Platinum certification, the highest level of the LEED system. It is the second office building in Ho Chi Minh City to have such a certificate, after the Deutsches Haus building in District 1.

Elsewhere, Ho Chi Minh City is set to welcome a new office building by the end of the year, D’Saint Raffles in District 1. The investor of D’Saint Raffles has integrated the entire technical infrastructure into a smart building management system including a central air conditioning system, automatic fire protection system including block detection and sprinkler equipment, and a European safety lightning protection device.

In addition, the standard lighting system is designed to save energy, reducing artificial lighting when natural lighting is at a certain level.

There is also expected to be two more high-end office buildings made available in District 1, Marina Central Tower (formerly The Sun Tower) and Daikin Vietnam Office headquarters, with a total area of about 93,000sq.m.

Marina Central Tower is located within the 10-hectare Grand Marina Saigon, featuring the world’s largest Marriott branded residences. This building has received LEED Gold certification with additional operational accreditations awaiting to be obtained.

The Daikin Vietnam building is one of the projects participating energy-saving technology solutions within a scheme implemented by the Ministry of Construction, with funding from the Global Environment Facility through the UN Development Programme.

Along with applying optimal solutions in planning, material selection, mechanical and electrical equipment, and water conservation, the building limits waste, effectively uses water resources, reduces greenhouse gas emissions, and uses energy economically and efficiently.

According to Knight Frank Vietnam’s assessment, the trend of tenants choosing green buildings is increasingly clear, especially for foreign businesses.

“Businesses in technology as well as research and development have led the demand for luxury office rentals, accounting for just over half of the total transaction area last quarter, followed by the pharmaceutical industry with 23 per cent,” said Leo Nguyen, director of Occupier Strategy & Solutions at Knight Frank Vietnam.

Grade B office buildings are also entering a state of improving quality. In the second quarter of 2024, the market recorded several changes, such as the Vincom Centre in District 1 being promoted to Grade A after upgrading and renovation.

According to Luong Thi My Thanh, general director of The Executive Centre Vietnam, one of the newest coworking spaces in Ho Chi Minh City, said that workspaces will no longer be a short-term strategy but must be comprehensively designed to meet the needs of long-term users.

“Workers’ health and sustainability in terms of design and equipment are essential. Furthermore, the workspace will need to have green areas and provide maximum natural light, good ventilation, and the ability to control environmental temperature inside the building,” Thanh said.

Since 2022, Thanh’s company has committed to only opening new offices in green-certified buildings, and about 70 per cent of its investment portfolio is classified as green.

Figures from a survey of more than 2,500 businesses conducted by Cushman & Wakefield Vietnam in July showed that 78 per cent of people thought office occupancy would remain unchanged or continue to increase in the next three years.

In particular, cost efficiency is still the top priority of businesses. Next are the factors of classification, design and technical characteristics, and management services of the building. The more prominent factor in the survey belongs to environmental, social, and governance (ESG) criteria and buildings with sustainable design.

Ngoc Le, senior sales director at Cushman & Wakefield Vietnam, said that real estate that achieves green certification has a positive impact for both building owners and tenants.

“While sustainable buildings have the potential to be energy efficient, integrating renewable energy settings will significantly reduce emissions, create more environmentally friendly communities, and thereby achieve higher rental rates and lower vacancy rates than buildings without green certification,” Ngoc said.

Nguyen from Knight Frank Vietnam said that Ho Chi Minh City’s office market is constantly developing, newly opened Grade A buildings have an occupancy rate of over 70 per cent, and tenants are increasingly inclined to choose rental locations with green elements. This helps increase negotiating advantages for investors.

“New leasing transactions were recorded mainly in Grade A office buildings that opened last quarter. The occupancy rate in the Grade A segment is at a stable level. Some older buildings are losing tenants to newly built Grade A buildings with ESG certification,” said Nguyen.