Bring on the Green Energy: LEED Construction in HCMC

By: Jesus Lopez Gomez

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).


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.)

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“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.


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.

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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.

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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.

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“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.

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“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.”


Tearing Down Old Buildings in HCMC Is A Smarter Plan

By: Keely Burkey

Over 75% of buildings in Ho Chi Minh City are currently unsound or unsafe. Many of the buildings in question are old residential buildings – condos or apartment complexes built before 1975. As The Vinh Tran, a member of the Ministry of Construction explains through an interpreter over a cup of tra da, although there are some 500 such old condos in and around Ho Chi Minh City, most are concentrated in Districts 1, 3, 5 and 10. “In total, there are around 50,000 apartment units that need to go”, he pointed out.

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This might come as strange news for anyone who follows real estate in the city. After all, land prices are soaring, and this is especially true for land in Districts 1 and 3. Some developers, Tran reports, have been waiting for land to become available for over 20 years. And it’s not just the developers – the government is equally prepared to develop new projects over old and unsafe projects. The holdouts? The tenants of the buildings themselves.

Location, Location, Location

According to real estate regulations in Vietnam, any building constructed before 1975 is considered liable for destruction or renovation. The problems come into play when tenants, who own apartments or have binding leasing agreements, refuse to give up their home to make way for new building construction. Legally, Tran explains, the government has no right to forcibly remove a resident from their proper home, even when the house is hazardous and potentially dangerous.

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When you factor in the monetary incentive that members of the Ministry of Construction are offering tenants, you have to ask: why stay? First and foremost, they live in prime locations, Tran says. Development plans in the city are widely known, and the tenants who live in the buildings know the worth of the properties they live in. Many tenants consider the compensation offered by government officials to be inadequate when judged against the property’s worth as well as other factors.

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After all, many tenants living in the degrading houses work in the centre of the city in a variety of lower paying jobs. Occupational options seem bleak when forced with the idea of relocation to affordable housing units on the outskirts of the city. However, as the years pass and the buildings degrade, these citizens are playing a dangerous game of chicken.

Building on the Edge

The Vinh Tran is adamant about this issue and considers it a keystone preventing the city from efficient development strategies. Rather than develop from the centre of the city and then slowly progress outward, as many cities naturally develop around the world, in Ho Chi Minh City we’re seeing a different path.

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Real estate companies, waiting years for land to become available in the city centre, have grown impatient. Now Novaland and other development companies have opted instead to invest money in land around the outer rim of the city. Tran considers this a less-than-optimal solution, as it results in uneven and ultimately uncontrollable real estate development.

Traffic congestion and even pollution would be less, he maintains, if development was allowed to go forward on old condo complexes.

Slow Progress

Despite the lengthy compensation negotiations, old buildings are gradually being torn down – just not at the rate that the city has targeted. For example, Vietnam News reported that since 2010 only 10 old apartment buildings were demolished.

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Recently, Tran reports, government officials have thought of a new incentive which has been attracting more old apartment tenants: a guaranteed spot in the new apartment building, and sometimes a job within the building as well. These stable jobs, often as security guards or cleaners, have appealed to many tenants in existing buildings, whose options continue to decrease in a continually competitive market.

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However, it seems as though for the moment The Vinh Tran will have to be content with the slow crawl towards uniform modernisation in the centre of the city. Without adequate resources to make existing tenants happy, including compensation and suitable alternative housing, these crumbling houses will serve as a visual reminder of the progress yet to be made.


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