Bring on the Green Energy: LEED Construction in HCMC

Real Estate - Saigon/HCMC: May 19, 2017

Go out on any warm day and you’re likely to hear the collective “whoosh” of the city’s many air conditioner units perched outside residences. Truth be told, Vietnam isn’t known for green energy initiatives but some developers are looking to change that.

Sectors Doing Green in Vietnam* (measures green buildings that are certified and/or registered with LEED, LOTUS, EarthCheck, BCA GreenMark or following GreenStar).

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Total: 41

  • 42%: Factory
  • 22%: Office
  • 19%: Hospitality
  • 8%: Supermarket
  • 6%: School
  • 3%: Residential

 

*Source: “Is There a Future for Green Buildings in Vietnam?” by Solidiance

A centralised air conditioning system would be more cost effective and friendly to the environment, but the reason you don’t see these and other sustainable practices adopted more widely in construction is partly just short-sightedness. LEED expert and Colliers International Vietnam General Director David Jackson explained that the benefits of green building are buyer- and tenant-centric. (LEED stands for Leadership in Energy and Environmental Design, a US rating system for the environmental performance of a building.)

leedImage source: deutscheshausvietnam.com

“The issue with residential is that a lot of people won’t invest because the benefits (of having more efficient equipment or construction materials) stay with the owner rather than the builder,” he said. Never mind that the cost between building a sustainable structure and a conventional building is “minimal”, he added.

LEED vs. LOTUS

Interest in LEED certification has grown to a point where a separate, more locally oriented set of standards has been developed, LOTUS. Those standards have been slow to take hold. Vietnam’s Green Building Council reported in December that just 12 projects had sought and acquired LOTUS certification.

leedImage source: refico.com.vn

In 2013, the council reported that 41 buildings had received some kind of sustainability certification, either from LEED, LOTUS or a comparable metric. While office buildings like the Deutsches Haus account for 22 percent, the majority, 42 percent, were factories. The residential sector had the smallest share of certified buildings, 3 percent. “Green building adoption has been limited in Vietnam,” the council wrote in its 2013 report, which also pointed out that “factories have led the way thus far”, like the LEED certified Colgate-Palmolive Plant in Cu Chi, the first one to obtain the certification in the country in the summer of 2016.

leedImage source: deutscheshausvietnam.com

The Binh Duong province plant, which opened in 1996, worked with international engineering firm Royal HaskoningDHV to remake the 18,600-square-metre facility. The plant employs around 1,200 people and makes 250 million products annually.

“Slowly, Asia’s Factories Begin to Turn Green,” read a New York Times headline in 2014 describing a Vietnam Intel plant with a water-reclamation system and one of the country’s largest solar panel clusters. The developments resulted in questions from local authorities: they were reportedly seeking direction on what kind of standards the Vietnamese government could impose on its country’s manufacturers.

Deputy Managing Director of Savills Vietnam Troy Griffiths said the regulatory framework that would support greater green building development is largely absent.

leedImage source: refico.com.vn

“Until you get to a very mature city level … with tax incentives, development incentives … it’s going to be very hard to push for [sustainable development],” he said.

Some development incentives do, however, exist right now. Jackson described a Ho Chi Minh City building code that allows builders to add an extra floor to their edifice if sustainability standards are met.

A Green-Tinged Future?

Looking forward, Jackson said firms are going to need to figure out how to help developers frame their sustainability interests in terms of market value for buyers. In other words, “what people look at here in terms of development is which one is going to sell my property more,” he said.

leedImage source: deutscheshausvietnam.com

“And I think people will focus on LEED” because of its international recognition, he said.

Jackson said developers need to involve a green building consultant early in a project. “By bringing on a green consultant at an early stage of a project … they will guide you in terms of cost savings,” he said.

Vietnam has also eased this process by making sustainable appliances more widely available. “When you’re looking at green products, five, six years ago, it was very difficult to find low flush toilets,” Jackson said. “You can get that here now.” Vietnam has an edge in the green building space because of its wealth of architects and international architecture firms. At the end of the day, “you’re going to make savings in the long term,” Jackson asserted.

With the decreasing costs and greater sensitivity to environmental issues, Jackson said there’s reason to be optimistic about the adoption of sustainable building practices – he’s even certain about it. “For me, all buildings should be green buildings,” he said. “I think with technology (becoming less expensive) and more experience in the market, all building is going that way.”